Informe Nº: 14/05/2014

For every 1% growth in female employment household income increases 14%

The main sources of progress and prosperity are the increases in productivity that underpin improvements in wages and massive generation of quality employment leading to families having more income generating members. Therefore, it is essential that labor and welfare institutions are very sensitive to incentives that favor responsible motherhood and labor market inclusion.

The INDEC presented the results of the Annual Survey of Urban Households (EAHU) for the 3rd quarter of 2013. Unlike the Permanent Household Survey (EPH), which refers to data only from the large urban centers, the EAHU expands its coverage to small towns in the interior of the country (2,000 or more). EAHU includes employment data, but this time a positive aspect is that data on income distribution by province is also presented.

One of several interesting data provided in this report is the per capita income of households disaggregated by province. According to INDEC, the median per capita household income in 2013 is about $ 2,500 per person per month. This means that half of Argentine households live on less than $ 2,500 per month per person; however, this average hides a strong heterogeneity among regions.

While many factors determine the differences among provinces there is one which is particularly suggestive, the association between level of household income and the formation of families. The data published by the INDEC shows that:    

· In Chaco, Formosa, San Juan and Santiago del Estero there are 3.7 members per household, 37% of women work and average family income per capita reaches $ 1,576.

· In the rest of the North West, Cuyo, Pampas and Mesopotamia regions there are 3.4 members per household, 42% of women work and per capita household income is $ 2,310.

· In the City of Buenos Aires, Santa Cruz and Tierra del Fuego there are 3 members per household, 50% of women work and per capita household income is $ 4,822.  

These data show that higher levels of income are associated with higher women employment rate and smaller family size. With extreme simplification, the observed association could be summarized in that for each percentage point increase in the female employment rate per capita household income increases by approximately 14%.

This previous analysis of the relationship between women's employment and income level of households is rudimentary and requires more complete and sophisticated statistical analysis to give rigor and precision. Nonetheless it shows the importance of generating high quality employment opportunities for women as a determinant of social progress. This relationship, which not only holds for Argentina’s provinces but also for other countries, shows that as women find more job opportunities, household income increases and family size tends to be smaller. An increase in per capita household income results in better life quality and better prosperity due to more and better educated children.

This alerts that the increases observed advances in social legislation in the last decade, while important, are insufficient and unsustainable. First because they are linked to the boom caused the high prices of raw materials and very low interest rates. Second because they respond to a conservative vision that puts more emphasis on the distribution of public resources via welfarism instead of creating opportunities for families to be agents of their own progress.

To take a progressive turn in public policy is essential to reform labor institutions with emphasis on job creation for women. Especially for young people and those coming from poor households. The other centerpiece is the redesign of welfare plans incorporating incentives to responsible motherhood and greater labor participation, particularly by modernizing the AUH (universal child allowance) and PROGRESAR (welfare program which provides a monetary incentive for students). 

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Relevancia en formulación, implementación y gestión de reformas en
diferentes áreas sociales desde 2004.
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