The Economic Benefits of Gender Budgeting in Vienna

Whereas previous studies on the effects of gender budgeting on economic equality have mostly focused on distribution-relevant indicators such as women's labour market participation or the gender pay gap, an OECD study from 2015 and the European Institute for Gender Equality (EIGE, 2017) simulated the macroeconomic effects of increased gender equality using input-output models. The present WIFO study breaks new ground by building a bridge between the microeconomic impact analysis of individual measures and the estimation of their macroeconomic effects at sub-national level.

In a first step, the growth potential through more gender equality in Vienna was assessed by means of literature and comparative data analysis. According to the "Gender Equality Index Labour Market", which maps the gender equality potential in core areas of labour market integration in Austria at the provincial level, gender equality in Vienna is relatively advanced. However, there is still potential for improvement, particularly regarding the compatibility of family and career and the division of unpaid work between men and women. According to EIGE (2017), increasing labour market participation and the qualification of women in the MINT subjects can in turn trigger noticeable macroeconomic effects.

In a second step, therefore, the gender budgeting measures listed in the Vienna Financial Statement 2017 were structured in terms of their content and objectives. This shows that (with possible multiple answers) around 38 percent of the measures can be assigned to the area of "paid and unpaid work" and around 14 percent to the area of "education and further training".

Finally, micro- and macroeconomic impact analyses were carried out for the extension of the U1 underground line towards Leopoldau and for the introduction of the non-contributory kindergarten in Vienna. The former was based on an estimate of the effects of the newly built U1 stations on labour market participation, employment and unemployment of women living in the immediate vicinity. According to this, in the grid cells directly affected by the U1 extension, the unemployment rate of the female resident population is about 0.7 percentage points lower (the unemployment rate has decreased more strongly there) than that of other women resident in Vienna.

The impact analysis of the introduction of the non-contributory kindergarten is examined in a two-part procedure. It takes into account both the effects due to a potentially increased supply of labour as a result of the relief from unpaid work and the effects triggered by the expenditure on non-contributory kindergarten attendance via the economic cycle. For 20- to 39-year-old women living in Vienna with children up to the age of 6, the employment rate increased by 1.5 percentage points with the introduction of the non-contributory kindergarten. The improved compatibility of family and career made it possible for around 1,000 Viennese women to offer their labour force on the labour market. In total, 7,600 jobs are associated with the City of Vienna's expenditure on the non-contributory kindergarten, 5,900 of them in Vienna.

In addition to the complexity of capturing the effectiveness of gender budgeting measures, the scarce empirical evidence available to date – especially for the macroeconomic effects of individual measures – is probably due to the fact that such analyses place high demands on the data and often reach the limits of data availability. Expanding data collection and making it available could therefore also contribute to a more comprehensive evaluation of measures and evidence-based policy recommendations.