Markets Empower Women

Market-driven technological and scientific innovations heighten women’s material standard of living, promote individual empowerment, reduce sexism and other forms of collective prejudice, and foster cultural change…

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Over the last 200 years, economic progress has helped to bring about both dramatically better standards of living and the extension of individual dignity to women in the developed world. Today the same story of market-driven empowerment is repeating itself in developing countries.

Competitive markets empower women in at least two interrelated ways. First, market-driven technological and scientific innovations disproportionately benefit women. Timesaving household devices, for example, help women in particular because they typically perform the majority of housework. Healthcare advances reduce maternal and infant mortality rates, allowing for smaller family sizes and expansion of women’s life options. Second, labor market participation offers women economic independence and increased bargaining power in society. Factory work, despite its poor reputation, has proven particularly important in that regard.

In these ways, markets heighten women’s material standard of living and foster cultural change. Markets promote individual empowerment, reducing sexism and other forms of collective prejudice.

Women’s empowerment in many developing countries is in its early phases, but the right policies can set women everywhere on a path toward the same prosperity and freedom enjoyed by women in today’s advanced countries.

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Support for Federal Paid Leave Program Depends on Cost

Americans aren’t willing to cut spending, increase the deficit, have fewer employer-provided benefits, or reduce the number of female managers in the workforce in exchange for federal paid leave…

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The new Cato 2018 Paid Leave Survey of 1,700 adults finds that nearly three-fourths (74%) of Americans support a new federal government program to provide 12 weeks of paid leave to new parents or to people to deal with their own or a family member’s serious medical condition. A quarter (25%) oppose establishing a federal paid leave program. Support slips and consensus fractures for a federal paid leave program, however, after costs are considered.

The survey found 54% of Americans would be willing to pay $200 a year in higher taxes, a low-end estimate for a 12-week federal paid leave program. However, majorities of Americans would oppose establishing a federal paid leave program if it cost them $450 a year in higher taxes (52% opposed) or $1,200 a year in higher taxes (56% opposed), the mid-range and high-range cost estimates respectively.

These low-, mid-, and high-range cost estimates are based on the most high-profile federal paid leave program proposed to date: The Family and Medical Insurance Leave Act (FAMILY Act).

The survey also did not ask questions about what paid leave policies Americans would like to see offered at private companies. Instead, the Cato 2018 Paid Leave Survey focuses on what people think about establishing a government-provided paid family leave program at the federal level.

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The Unfortunate Truth About Government-Supported Paid Family Leave

Could government-mandated paid family leave make women more equal at home and in the workplace? The data suggests no…

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Paid parental leave provides workers with financial compensation during temporary absences following the birth or adoption of a child. Private companies often provide paid leave and the federal government mandates 12 weeks of job-protected unpaid leave, but recently policymakers and advocates have become dissatisfied with the status quo.

Proponents of federal intervention argue that the private market does not or cannot provide sufficient paid leave. Moreover, proponents believe government supported leave would improve labor market outcomes and reduce gender and labor-market inequality.

However, the evidence that suggests otherwise…

First, ample data show that the private market provides paid leave at rates about 30 to 50 percentage points higher than proponents claim. Private paid leave provision has grown three- or fourfold over 50 years and continues to grow. This trend indicates industry is responsive to employee demands.

Second, workers may not be better off under federal paid leave and may be worse off. Government intervention provides new incentives, and individuals are likely to adapt accordingly. Evidence suggests government supported leave may result in wage or benefit reductions, female unemployment, or reduced professional opportunities for women.

Government intervention is also unlikely to correct gender or labor-market inequality in ways proponents desire. For example, families may respond to the policy by increasing women’s household work contributions relative to men’s. Redistributive effects of government intervention are likely to harm workers.

Policymakers should not adopt paid parental leave policies. Instead, they should consider improving workers’ lives through reforms that increase economic efficiency, remove barriers to flexible work, and increase choice.

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Nordic Gender Equality Policies Reinforce the Glass Ceiling

The Nordic countries are widely regarded as world leaders in gender equality, but several aspects of Nordic social policies have contributed to a glass ceiling…

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The rise of the Nordic welfare state has been a double-edged sword: creating some benefits for women’s careers, but also creating barriers to women’s professional progress. 

Although Finland, Sweden, Denmark, Norway, and Iceland have high female employment rates and an unusually gender-equal history, these Nordic countries also feature disappointingly low numbers of women managers, executives, and business owners. For example, in Denmark a mere 28% of women are employed as managers, whereas in the U.S. 43% are.

A common view is that the gender equality reflects the social welfare policies of these nations. However, in actuality, the lack of women’s professional progression is due to the welfare state.

State-enforced ender quotas have been ineffective and several aspects of Nordic social policies have negatively affected women’s career progress.

Nordic gender quotas laws have gained international attention in recent years, with policymakers advocating for similar legislation as Norway’s 2003 law requiring 40% of board members of public companies to be women. However, once the law went into effect in 2006, a challenge became apparent: there was a shortage of experienced individuals to fill the positions. Gender quotas led to less experienced board members, greater company leverage, higher company acquisition rates, and declining operating performance. Meanwhile, gender quotas have not meaningfully improved Nordic women’s professional outcomes in terms of leadership rates, pay, or career goals, and if anything act merely as a symbol of these countries shattering the glass ceiling.

Nordic public monopolies in female-dominated sectors such as health care, child care, and elderly care reduce development in the parts of the labor market that women generally occupy. Since the wages in government monopolies are flat, the women who make up these industries have less incentive to work. And although there are some public-sector managerial positions, opportunities for individualized careers and business ownership are comparatively limited.

High tax rates are another obstacle for women’s career progression, as they reduce incentives for paid work by reducing take-home pay. Unfortunately, women’s “opportunity cost” is often perceived to be higher because they could otherwise use the time on other productive untaxed domestic activities. Additionally, high taxes reduce women’s ability to purchase service substitutes for household work. Even when the government provides welfare subsidies for public services that can encourage women to work, high taxes discourage them from working more.

National paid and unpaid leave policies, work entitlements, and other family benefits encourage women to work part-time rather than full-time, hindering their ability to climb the career ladder. Generous childcare and maternity leave policies make reducing work hours attractive, but can disqualify women from top jobs.

Reforms that enable women to climb the professional ladder organically provide a better approach than governmental policies and legislation. For example, more women reach executive positions in Iceland, the Nordic country with the smallest welfare state, than in Denmark, a Nordic country with an unusually large one.

The Nordic Gender Equality Paradox is important to keep in mind in countries such as the United States, where Nordic-style welfare policies are routinely touted as a way of promoting gender equality without tradeoffs.

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Freedom — Not Socialism — Drives Gender Equality

International Women’s Day traces its history to the rise of global socialism in the early 1900s, but the reality of centrally planned economics is shockingly sexist, no matter how much lip service was paid to gender equality….

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Today is International Women’s Day, a holiday that emerged post-Bolshevik Revolution and traces its roots to socialism both in the United States and abroad. However, contrary to popular belief, the origins of socialism are not as progressive as many of its adherents believe — certainly not on the point of women’s equality — and wherever socialism has been enacted, it is women’s needs that have been forgotten first.

Socialism was arguably a reactionary response to how the Industrial Revolution transformed society. Industrialization created a class of nouveau riche who gained wealth through market transactions rather than by birthright, while factories brought women into the labour force en masse, granting them economic independence and bargaining power that altered family dynamics and disturbed old-fashioned sensibilities.

Socialism presented an alternative to the unprecedented social mobility and rapid changes of the industrial age, and many prominent socialists demanded a return to ancient values, including traditional gender roles.

In fact, Friedrich Engels, who co-founded Marxist theory alongside Karl Marx, lamented capitalism’s equalizing effects on the genders, believed that the rise in women breadwinners married to homemaking husbands was not only “insane” but also “unsexes the man and takes from the woman all womanliness.” Such a reversal of traditional gender roles, Engels continued, “degrades, in the most shameful way, both sexes, and, through them, Humanity.”

With Marxist thought-leaders like Engels asserting that men should not participate in domestic activities, women were expected both to work outside the home and to do all the housework as well. The state provided childcare, but the waiting list was often long.

As managers of the household, women felt the shortages’ sting first and it fell to them to find substitutes for everyday goods. There was a severe lack of food, baby formula, housing, and just about everything else. And in centrally planned economic systems without any market incentive to fulfill human needs, it is women’s needs that were forgotten first.

Economic planners diverted resources away from producing anything considered feminine, and therefore frivolous and bourgeois. Right up until the fall of communism in the Eastern Bloc countries, communist factories failed to manufacture even the most basic items for women, such as sanitary products. Ordinary women’s sanitary products became sought-after items on the black market and most women made do with improvised substitutes. Women often sewed their own clothes or improvised beauty products from kitchen items, even though anyone who looked “too nice” was likely to be investigated.

Further, Communist officials saw women as just another means of punishing men, rather than as individuals with distinct identities.

At least five million prisoners toiled in the Soviet Union’s Gulag forced labor camp system — created under Lenin and massively expanded under Stalin —toiled in the camps at any given time during the system’s peak from 1936 to 1953, mining radioactive material, hauling logs barefoot in winter, or performing other forms of slave labor. Female Gulag inmates were almost always sentenced for the alleged crimes of their husbands or fathers, and in addition to the other terrors of the labour camps, also endured institutionalized sexual violence.  

Operational Order of the Secret Police No. 00486, “About the Repression of Wives of Traitors of the Motherland and the Placement of Their Children,” stated “women married to husbands at the time of their arrest are to be arrested…[and]…imprisoned… no less than five to eight years,” and one of the few ways for a woman to avoid arrest alongside her husband was, perversely, to accuse him of treason before anyone else did.

Upon a mother’s arrest, the Soviet system declared her children orphans and sent them as far away as possible. In the state-run orphanages, children were taught to feel shame and loathing for their parents, and, after regaining freedom a woman would often never learn of her children’s fate. 

There is no shortage of soaring communist rhetoric on gender equality, but that cannot make up for the pervasive sexism under central planning. Capitalism, on the other hand, has not just liberated women from the fields but helped society to see them as individuals.

Capitalism reduces the oppression rigidly imposed gender roles because embedded within market exchange itself is the idea that each individual should be free to pursue her self-interest. Market participation also increases women’s bargaining power within society, empowering them to lobby for legal equality and greater freedom. 

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The Intellectual Mothers of Libertarianism

The birth of the modern American libertarian movement can arguably be traced to the work of three women…

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Many years ago, thoughtful, well-intentioned, educated people in the United States all understood that socialism was the future. The average citizen might have retained a quaint belief in the American system of free enterprise, limited government, and individual rights, but among the cognoscenti — academics, artists, newspaper and radio pundits — it was widely recognized that the capitalist experiment had run its course. The overwhelming consensus was that the coming century would see economies managed by benevolent experts: the chaotic, dog-eat-dog competition of the market would give way to rational central planning.

History has been unkind to the old conventional wisdom. But the intellectual sea change preceded the visible collapse of socialist economies. The first real sign of the resurrection of the classical liberal idea came with the publication in 1943 of three groundbreaking books unabashedly defending individualism and free-market capitalism.

Almost as unorthodox as the books’ contents, in the climate of the 1940s, were their authors — Rose Wilder LaneIsabel Paterson, and Ayn Rand.

Each of these three remarkable women was an original thinker in her own right. But each also made a mark as a great popularizer of liberal ideas.

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Is the Gender Wage Gap Real — and is Sexism to Blame?

If we care about women’s wages, then we should focus on the cultural and societal pressures which exist outside the workplace walls…

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Today is Equal Pay Day, the day that marks how far into the next year women on average have to work to bring home the same income men earned in the previous year. We routinely hear that women get paid 76 cents for every dollar a man gets paid, an alarming workplace injustice — if it’s true.

Are women really getting paid less than men for doing the same work?

The 76 cent figure is based on a comparison of median domestic wages for men and women, but comparing men’s and women’s wages this way doesn’t tell the whole story. 

Empirical research finds that gender discrimination is not largely impacting wages.

This in no way discounts the negative experiences women have had, and we should not shy from denouncing inequitable treatmentCertainly somewhere a degenerate, sexist, hiring manager exists, someone who thinks to himself, “You’re a woman, so you deserve a pay cut.” But rather than that being the rule, this seems to be an exception. 

The data seems to indicate that the decisions that impact wages are more likely due to cultural and societal expectationsSimply put, men and women make different career choices that impact their wages.

After controlling for age, education, years of experience, job title, employer, and location, the gender pay gap fell from nearly twenty-five cents on the dollar to around five cents on the dollar. In other words, women are making 95 cents for every dollar men are making, once you compare men and women with similar educational, experiential, and professional characteristics.

The remaining 5 cent difference might be due to discrimination — or it might be due to differences in salary negotiations, or other reasons.

It’s possible that women would make different, more lucrative career decisions given different social or cultural expectations, but it remains the case that 1) men and women work in different industries with varying levels of profitability and 2) men and women, on average, make different family, career, and lifestyle trade-offs.

Only 35% of professionals involved in securities, commodities, funds, trusts, and other financial investments and 25% of professionals involved in architecture, engineering, and computer systems design are women. On the other hand, women dominate the field of social assistance, at 85%, and education, with females holding 75% of jobs in elementary and secondary schools.

It’s possible women may select different jobs than men because they care more about job content. On the other hand, women are considerably more likely to absorb more care-taker responsibilities within their families, and these roles demand associated career trade-offs.

Women are more likely than men to make decisions to accommodate family responsibilities, such as limiting (work-related) travel, choosing a more flexible job, slowing down the pace of one’s career, making a lateral move, leaving a job, or declining to work toward a promotion.” A full two-thirds of Harvard-educated millennial generation men expect their partners to handle the majority of child-care, and 43% of highly-qualified women with children leave their careers or “off-ramp” for a period of time.

Perhaps that’s why even though most women are convinced that other women are getting paid less than men for doing the same work, new polling data show that most women also believe they personally are being treated fairly.

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While 62% of women believe that women “generally” get paid less than men for doing the same work, just 14% believe their employer pays women less than men, and 17% say women have fewer opportunities for promotions where they work.

These are nearly 50-point shifts in perception from what women believe is generally happening in society at-large, and what they collectively report is happening based on their experiences in their own jobs.

Nonetheless, while 60% of American women women’s pay is impacted by different choices about how to balance work and family, 54% of women believe that gender discrimination is a “major reason” for the pay gap, and less than half attributed it to women working fewer hours or in different occupations than men.

It’s important to balance the empirical facts with where people are coming from, be mindful about how we explain the sources of the gender pay gap, and avoid suggesting women aren’t working as hard as men.

Although differences in the number of hours men and women work (and when those hours are worked) is a significant driver of the wage gap, only 28% of women thought this was a “major reason” that women on average earn less than men. 

Just because men on average work more hours in an office setting doesn’t mean women aren’t working the same — or more — hours, when you combine hours worked in the office and taking care of family and home responsibilities.

Is there any harm in fostering the widespread belief that gender discrimination in pay and opportunity is the rule, rather than the exception?

By painting women as victims of circumstance, the “equal pay for equal work” rallying cry perpetuates a dangerous myth. Allowing women to believe that a large part of their success is beyond their control, or that they are systemically undervalued, strips them of the confidence they need to succeed. Believing that the deck is stacked against them regardless of their choices undermines women’s risk-taking, accountability, and initiative. It also unhelpfully directs focus away from dealing with the real barrier to long-term earning power — social and cultural pressures.

Convincing women of widespread, overwhelming injustice against them isn’t helping. Instead, it risks holding women back by causing the very injury that equal rights advocates fight against.

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This Day in History: Celebrating 96 Years of Women’s Suffrage

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96 years ago today, on August 18, 1920, the Nineteenth Amendment to the United States Constitution was ratified. 

The amendment—which marked the culmination of the U.S. women’s suffrage movement—prohibited any United States citizen from being denied the right to vote on the basis of sex.

“The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of sex.

Congress shall have power to enforce this article by appropriate legislation.”

— Nineteenth Amendment, U.S. Constitution

What a perfect time to remember not just the crucial role women played in launching the libertarian movement, but the role that women with libertarian values have played in advancing women’s rights.

In honor of this historic day, here are a few of our favorite articles, videos, and podcasts on women & liberty:

  • Libertarians and the Struggle for Women’s Rights 
    • “A libertarian must necessarily be a feminist, in the sense of being an advocate of equality under the law for all men and women, though unfortunately many contemporary feminists are far from being libertarians.”
  • Mary Wollstonecraft’s A Vindication of the Rights of Woman
    • “Mary Wollstonecraft…is increasingly acknowledged as one of the most influential thinkers on women’s rights…Although not consistently libertarian, she was consistently in favor of equal legal rights for men and women, and she operated within a generally classical liberal framework.”
  • Rights and Responsibilities of Women
    • “When human beings are regarded as moral beings, sex, instead of being enthroned upon the summit, administering upon rights and responsibilities, sinks into insignificance and nothingness.”
  • Frederick Douglass on the Rights of Women
    • “A self-taught escaped slave, statesman, and leader of the American abolitionist movement, Frederick Douglass is best known for his speeches and autobiographies, in which he stressed the universal equality of all humans. While Douglass is well-known for his support for the abolition of slavery, he is less known for his outspoken support of the women’s liberation movement.”
  • How is Libertarian Feminism Different from Other Feminisms?
    • “Some libertarians are not aware of the differences between libertarian feminism and other kinds of feminism. They even criticize libertarian feminists just for being feminist without any knowledge of what libertarian feminism or even feminism itself stands for…Those libertarians…have not done their homework. When libertarian feminists say they want liberty for all women and men, they really mean it.”
  • What Does Libertarian Feminism Look Like?
    • “What does libertarian feminism look like? How does libertarianism appeal to women?…How can issues that affect women be approached from a libertarian perspective? It seems that there are more women among younger generations of libertarians. Is there an explanation for this?”
  • Libertarian Feminism: An Honorable Tradition
    • “Contrary to what some may think, the first feminist activists were not socialists, they were individualists and libertarians.”

Women’s Rights and Liberty

March is Women’s History Month, and today (March 8th) is International Women’s Day. What better time to remember the role women played in launching the libertarian movement, as well as the role women with libertarian values have played in advancing women’s rights?

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It’s no accident that feminism (and abolitionism) emerged out of the Industrial Revolution and the American and French revolutions. The equality and individualism that underlay the emergence of capitalism and republican government in the 18th century naturally led people to start thinking about the individual rights of women and slaves.

Many women involved in the American abolitionist movement took up the feminist banner, grounding their arguments in both cases in the idea of self-ownership, the fundamental right of property in one’s own person.

That classically liberal, individualist strain of feminist thought continued into the 20th century, as feminists fought not just for the vote but for sexual freedom, access to birth control, and the right to own property and enter into contracts.

Though, unfortunately, many contemporary feminists are far from being libertarians, a libertarian must necessarily be a feminist, in the sense of being an advocate of equality under the law for all men and women. 

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Women’s Equality Day

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Happy Women’s Equality Day! On this day in 1920, women were granted the right to vote when the 19th amendment was certified by law. In honor of this occasion read Cato research on feminism and women in the libertarian movement. 

A so-called “libertarian moment” can only be helped along by expanded appeal among women, and among feminist-minded folks of all genders. Individual rights are at the heart of feminism. It’s time for libertarians to reclaim that.” — Elizabeth Nolan Brown at libertarianismdotorg

A libertarian must necessarily be a feminist, in the sense of being an advocate of equality under the law for all men and women.” — David Boaz in huffingtonpost