3 Questions: Economic Impact of Globalization
Stephanie Seguino, Ph.D., professor of economics, is a macroeconomist studying the impact of globalization on income distribution and wellbeing. She's earned the ear of policymakers worldwide by showing that, while women — and ultimately children — bear the brunt, the entire economy suffers when some are marginalized. Seguino was a major contributor to a recently released report from the United Nations Development Programme (UNDP), Humanity Divided: Confronting Inequality in Developing Countries.
Q: Your research is directly influencing international policy at the United Nations, the World Bank, and the International Monetary Fund. What's that like and what shape is it taking?
A: There's nothing more gratifying than seeing that your work is useful to people, and I think it's really showing up in this Humanity Divided report. It's a major publication, so to get this debated on an international level — and be part of the conversation — is just extraordinary. I've been working for a long time to develop a framework for analyzing gender inequality. And I've been a strong critic of the World Bank and others who think if we provide equality of opportunity we shouldn't worry about equality of outcomes, that it's antithetical to capitalism to interfere. But a lot of the work I've done suggests that we do have to care about inequality of outcomes because that fuels inequality of opportunity. Just a simple example: if you are in a country in which men's wages are significantly higher than female wages, parents are going to differentially invest in their boys' education rather than girls', especially if their future social security is based on the earnings of their children, which is the case in many countries.
Q: You're starting new research that looks at the macroeconomic impact of racial inequality in the U.S.?
A: One of the things I want to do is to look at whether states that have the widest achievement gaps between black and white students grow more slowly than those states that do not. It's a way to argue that there are societal-wide effects of inequality. The research suggests that inequality is bad for the economy as a whole — it leads to more conflict, it leads to lower productivity growth in the future, it leads to more social spending on social services because people who are disadvantaged can't compete as well as others. We're starting with the U.S. because we have better data, but I think it will have broader implications once we establish the methodology. The issue of racial inequality is profoundly important for Europe.
Q: What's it going to take to eradicate global inequality?
A: Policies can help. Now more than ever we see a focus on inequality, and I think that we are at a political moment where it is feasible to adopt policies that we already know work.
The problem has been that the forces of globalization have really limited the role of government, and I think people believe that we have gone too far in that direction. It comes from anxiety — life has been economically insecure for the poor for a long time, but it's economically insecure now for the middle class and that's beginning to focus attention on this as a universal problem. It tells you a lot about sociological and psychological phenomena, that good ideas can lie around for a long time, but once they get a certain momentum you reach a tipping point in which the whole system will shift — and that's really more and more how I understand the world works.
Last modified May 19 2014 03:49 PM