Fiscal policy can reduce some gender inequalities directly. For example, conditional cash transfers providing household-level transfers for every child enrolled in school can create positive incentives for girls to remain in school longer and for households to reduce the time spent by school-age girls in care for younger dependents.<sup>14</sup> Here too a direct reduction in gender inequality in one area (time spent caring for younger dependents) may lead indirectly to a reduction in gender inequalities in another area (a reduction in the wage gap for externally supplied labor).

Fiscal policy can also directly reduce or exacerbate gender differences in paid employment. Around the world, women’s labor force participation rates are lower than men’s (ILO 2023). Women enter and exit the labor force more frequently than do men, which means their participation is more discontinuous than men, and they are more likely to be in part-time and seasonal jobs (ILO 2023). Women on average earn less than men, even after controlling for standard human capital variables (age, education, job experience), though the gap has narrowed in many countries over the last decade (Chamberlain, Zhao, and Stansell 2019). Women tend to dominate in informal employment, especially in low-income settings. Revenue policy can promote female employment by eliminating higher marginal rates on secondary earners in married couples; public expenditures can support unemployed women through unemployment insurance or informally employed women through social protection benefits. Here too, direct impacts today can lead to indirect impacts tomorrow. For example, women’s participation in the paid labor force can help rebalance expectations and social norms regarding women’s and men’s participation in social reproduction activities. An increase in labor force participation is good for the macroeconomy, and any policy encouraging labor force participation can potentially reduce gender employment gaps.<sup>15</sup> Fiscal policy can also support or undermine social reproduction. As noted earlier, social reproduction is the production and maintenance of human capabilities. It involves both daily household maintenance using women’s and men’s unpaid labor time and the commodities that men and women purchase. Social reproduction also includes unpaid activities such as fuel and water collection; cooking and cleaning and caring for children, the elderly, and other dependents; and providing cultural, social, athletic, recreational, and educational instruction that encourages the thriving and increased capability of dependents in many walks of life.

In the short run, social reproduction activities may positively impact labor productivity when workers are nourished, cared for, and replenished at home (Braunstein and others 2020). Social reproduction may also lead to direct increases in purchasing power. For example, consider the exchange of clothing between a mother with an older child and a mother with a younger child: even if no money changes hands, the time, effort, and social

> 14. In some countries, conditional cash transfers have also negatively affected maternal employment. For instance, Molyneux and Thomson (2011) noted that in a survey of women who received transfers from the Opportunidades program (Mexico), between one-third and half reported that the demands of the program conflicted with their income-earning activities, which echoed findings from other cash transfer programs in Latin America.

> 15. However, the gender wage gaps may be unchanged.

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