“People living on the poverty threshold are like us in almost every way. We have the same desires and weaknesses; the poor are no less rational than anyone else — quite the contrary. Precisely because they have so little, we often find them putting much careful thought into their choices: They have to be sophisticated economists just to survive".
Banerjee & Duflo - Rethinking Poverty

Year 2019, Esther Duflo, Abhijit V. Banerjee and Michael Kremer were awarded the Nobel Prize in Economics for their experimental approach to alleviating global poverty.

Esther Duflo, at the age of 46, is the youngest person to win a Nobel Prize in Economics. She is also the second woman to be awarded this prize (the first was Elinor Ostrom-2009). As a social science, it should not be something notorious that a woman won a Nobel Prize but, unfortunately, it is. And yet, currently only two women out of 88 laureates have achieved this (2.3%). This does not mean that we did not have outstanding economists, we had them, for example, Joan Robinson, and we have them now: working hard, making headway and hopefully soon reaping their well-deserved harvest.

But I will not digress any further; let us talk about Esther Duflo's work:

Esther was interested in social issues from a very early age. Her great contribution was the new focus on how to find out which public policies are useful to escape from certain problems (breaking down big challenges into simpler pieces). She also wanted to know what levers we should be pushing (the key is to know where the money should be spent, not how much), but always being aware and seeing the effects of that.

“If we are to move forward, we must get out of the habit of reducing people living in poverty to comic strip characters and spend some time really understanding their lives in all their complexity and richness.”

In the book, Rethinking Poverty, amongst many other things, she tries to help us understand that people immersed in poverty make rational decisions in an "irrational" world and that in order to get out of this situation it is necessary to boost them through social policies, but always applying scientific rigour as is done in other fields. She uses the analogy that we should treat social policies as if they were the administration of medicines and that if we do so and do not try to understand whether they are working well (or not), "we are not any better than medieval doctors and their leeches”.

We may be tempted to think that this is all well and good, but our developed world has come a long way and we are far from this kind of poverty and the gender inequalities that go with it. Nothing could be further from the truth. Esther has also spoken out on gender inequality and economic development in Women Empowerment and Economic Development (2012). She explains that it is often argued that the high correlation between women's empowerment and economic development can ensure gender equality, but "Does this imply that pushing just one of these two levers would set a virtuous circle in motion? Esther argues the following response: "Interrelationships are probably too weak to be self-sustaining, and that continuous policy commitment to equality for its own sake may be needed to bring about equality between men and women.”

And does all this have any bearing on our world and International Women's Day? Well, in my opinion, a lot.

The 2030 Agenda sets out 17 Sustainable Development Goals (SDGs) and one of the targets, 1.2., is the reduction of the AROPE (At Risk of Poverty and Exclusion) rate, with the target being 11.05% in Spain.

The Basque Country (year 2020) is one of the best-placed autonomous communities according to the 11th AROPE Report with 13.9%, and only Navarre had better results with 12%.

Even so, the difference between genders is clear:

País Vasco AROPE por sexo

PAÍS VASCO2008201520162017201820192020
POB.TOTAL 2.159.427 2.165.100 2.164.066 2.167.283 2.170.868 2.177.880 2.189.138
Hombre 1.057.895 1.050.868 1.049.490 1.049.808 1.050.851 1.054.101 1.059.049
Mujeres 1.101.532 1.114.231 1.114.577 1.117475 1.120.017 1.123.779 1.130.089
%AROPE 13,9% 17,9% 15,9% 14,5% 12,1% 14,4% 13,9%
%Hombres 13,7% 17,7% 14,4% 14,0% 11,2% 12,4% 11,1%
%Mujeres 14,0% 17,5% 17,3% 15,0% 12,9% 16,2% 16,6%
TOTAL POB. AROPE 300.160 381.0058 344.086 314.256 262.126 312.766 304.263
Hombres en AROPE 145.034 186.006 151.312 146.451 117.759 130.977 117.247
Mujeres en AROPE 154.628 194.792 192.997 167.917 144.404 181.889 187.172

Source: 11th AROPE Report


It stood at 26.40% (12.4 million people) and the poverty rate (not taking into account Severe Material Deprivation and Low Household Employment Intensity) stood at 21% (9.9 million) in Spain in 2020.

Among these 9,925,338 people are at risk of poverty: 5.24 million are women and 4.68 million men, a difference of 560,000 more women.

Women are more at risk of falling below the poverty line given their personal circumstances. For example, 38.9% of single-parent families are at risk of poverty and 81.3% of single-parent households are headed by a woman. In addition, women enter the labour market with significant gaps and inequalities, with worse contractual conditions and worse pay, as senior researcher Susana Franco highlighted in her post last year. These regulations play an important role in reducing poverty, not only for women but also for our children. Let us remember that the poverty rate for children under 16 is 27.6% (2,031,057 children), the highest by far for all age groups (remember that the average was 21%).

It would not be true to say that women’s route out of poverty ends here. Once their working life is over, women in Spain are again penalised by a pension system that punishes them again; February 2021 (including all types of pensions) men were paid on average 33% more than women: €1,250.87 per month for men versus €826.41 for women

What all these data show us is that, as stated in the last Orkestra Competitiveness Report 2021, building a region's competitiveness at the service of well-being is not just necessary, it is essential. Esther Duflo's work tries to convey how necessary it is to establish the right framework and have a sound knowledge of our environment and society to push the right levers.

It is precisely along these lines that last year's report presented a new competitiveness framework that included welfare dimensions and two cross-cutting elements: internationalisation and inclusiveness; the latter manifests itself in different ways, depending on the dimension analysed (inequalities related to wealth, gender, race, age, sexual orientation, disability, etc.).

 


References

  • Banerjee, A.V. & Duflo, E (2015) Repensar la pobreza. Ed. Taurus
    ISBN: 978-84-306-0903-1
  • Duflo, Esther.  Women Empowerment and Economic Development, Journal of Economic Literature 50 (4) (2012) 1051-1079
    DOI: 10.1257/jel.50.4.1051
  •  EAPN España.
    EL ESTADO DE LA POBREZA. Seguimiento del indicador de pobreza y exclusión social en España 2008-2020. 11º Informe 2021.
  • ORKESTRA (2021). Construir la competitividad al servicio del bienestar.
    Informe de competitividad del País Vasco 2021
    ISBN: 978-84-1325-134-9
  •  Instituto Vasco de la Mujer - Gobierno Vasco. Informe 45 - La brecha de género en las pensiones en la CAPV  

Carme Vallverdu

Carme Vallverdú 

Carme Vallverdú holds a Degree in Economics from the Pompeu Fabra University and specialized in Quantitative Methods. Her professional career has developed in the field of Auditing and Finance, completing a Masters in Management of Paperwork Control at the EADA (Barcelona Business School).

See full profile