Connect with us

Economics

How Domestic Violence is a Threat to Economic Development

Stopping violence against women is not only a moral imperative, new evidence shows that it can help the economy.

Published

on

By Rasmane Ouedraogo and David Stenzel

Stopping violence against women is not only a moral imperative, new evidence shows that it can help the economy.

It’s being called the “shadow pandemic”—an increase in physical, sexual and emotional abuse of women is taking place amid the lockdowns and societal turmoil caused by the global health crisis.

The evidence is only growing. In Nigeria, the number of reported cases of gender-violence linked to lockdowns increased by more than 130 percent. In Croatia, reported rapes increased by 228 percent during the first five months of 2020 compared to 2019.

The economic costs of domestic violence are higher during downturns and could make recovery more challenging.

For many women around the world, no place is more unsafe than their own homes. As the world recognizes International Day for the Elimination of Violence against Women, it has become clear that the pandemic has made this violence worse.

Abuse of any form is fundamentally wrong and a violation of basic human rights. New IMF staff research shows how violence against women and girls is a major threat to economic development in a region where domestic violence is widespread—sub-Saharan Africa.

The results of our study suggest that an increase in violence against women by 1 percentage point is associated with a 9 percent lower level of economic activity (proxied by nighttime lights).

A drain on society

Violence against women and girls has a multi-dimensional effect on the overall health of an economy both in the short-term and long-term.

In the short term, women from abusive homes are likely to work fewer hours and be less productive when they do work. In the long run, high levels of domestic violence can decrease the number of women in the workforce, minimize women’s acquisition of skills and education, and result in less public investment overall as more public resources are channeled to health and judicial services.

Previous studies have found domestic violence costs a given economy between 1 and 2 percent of GDP. However, these studies use simple accounting mechanisms and often don’t account for potential reverse causality.

Our research takes a new approach, matching deep survey data of women in the region with satellite imagery and employs appropriate technical methods to address endogeneity issues.

We look at data from the US Agency for International Development’s Demographic and Health Survey collected from the 1980s to the present. The surveys ask women specific questions about mistreatment.

The data come from 18 sub-Saharan African countries, covering more than 224 districts and more than 440,000 women representative of around 75 percent of sub-Saharan Africa’s female population.

The surveys found that more than 30 percent of women in the region had experienced some form of domestic abuse.

To measure the impact on economic development at a district level, we compare the survey data with satellite data on nighttime lights provided by the US National Oceanic and Atmospheric Administration. Nightlight satellite data can be a powerful tool for measuring economic activity when the most used measure for economic activity—gross domestic product—is not available at the sub-national level.

We found that higher levels of violence against women and girls are associated with lower economic activity, driven mainly by a significant drop in female employment. The physical, psychological, and emotional violence that women experience makes it more difficult for them to achieve or maintain a job.

Based on this connection, if sub-Saharan African countries in the sample were to reduce the level of gender-based violence closer to the world average of 23 percent of women experiencing abuse, it could result in long-term GDP gains of around 30 percent.

The pandemic’s toll

An economic downturn, such as the one caused by the pandemic, can contribute to an uptick in domestic violence. This exacerbates the economic costs of domestic violence compared to normal times.

Our research also found other evidence for the negative impact of domestic violence on economic activity. Domestic violence is more detrimental to countries without protective laws against domestic violence and countries rich in natural resources where extractive industries are more likely to crowd out more women-centered jobs and lead to less economic power among females.

We also found that the economic costs of violence against women is lower in countries like South Africa, where there is a lower gender gap in education between partners and where women have more decision-making power than in other sub-Saharan African countries.

Stopping violence against women is an indisputable moral imperative, but our research shows that it’s economically important too. The economic costs of domestic violence are higher during downturns and could make recovery more challenging.

Countries should take efforts now to strengthen laws and protections against domestic violence. Strong laws are critical to deter violence against women, protect victims of domestic violence, and promote women’s participation in the workforce.

Improving education opportunities for girls is an important step in the longer term. Reducing the gender education gap gives women more economic freedom and less ability to be influenced and controlled by men.

In efforts to build back better from the pandemic, policies to support women and combat gender-based violence are more important than ever.

Related links:
Engendering the Recovery: Budgeting with Women in Mind
The COVID-19 Gender Gap
Voting on Gender Parity
Ending Harassment Helps #TheEconomyToo

 

We want to hear from you!

Click here for a 3-question survey on IMFBlog.

 

Read More

Continue Reading

Economics

FT-IGM US Macroeconomists Survey for December

The FT-IGM US Macroeconomists survey is out (it was conducted over the weekend). The results are summarized here, and an FT article here (gated). Here’s some of the results. For GDP, assuming Q4 is as predicted in the November Survey of Professional…

Published

on

The FT-IGM US Macroeconomists survey is out (it was conducted over the weekend). The results are summarized here, and an FT article here (gated). Here’s some of the results.

For GDP, assuming Q4 is as predicted in the November Survey of Professional Forecasters, we have the following picture.

Figure 1: GDP (black), potential GDP (gray), November Survey of Professional Forecasters (red), November SPF subtracting 1.5ppts in Q1, 05ppts in Q2 (blue), FT-IGM December survey (sky blue squares), all on log scale. FT-IGM GDP level assumes 2021Q4 growth rate equals SPF November forecast. NBER defined recession dates peak-to-trough shaded gray. Source: BEA 2021Q3 2nd release, Philadelphia Fed November SPF, FT-IGM December survey, and author’s calculations.

In the figure above, I’ve used the SPF forecast of 4.6% SAAR in 2021Q4; the Atlanta Fed’s nowcast as of yesterday (12/7) was 8.6% SAAR. A new nowcast comes out tomorrow.

Interestingly, q4/q4 median forecasted growth equals that implied by the Survey of Professional Forecasters November survey (which was taken nearly a month before news of the omicron variant came out).

The q4/q4 forecast distribution for 2022 is skewed, with the 90th percentile at 5% growth, the 10th percentile at 2.5%, and median at 3.5%. I show the corresponding implied levels of GDP (once again assuming 2021Q4 growth equals the SPF ).

Figure 2: GDP (black), November Survey of Professional Forecasters (red), FT-IGM December survey (sky blue squares), 90th percentile and 10th percentile implied levels (light blue +), my median forecast (green triangle), all on log scale. FT-IGM GDP level assumes 2021Q4 growth rate equals SPF November forecast. NBER defined recession dates peak-to-trough shaded gray. Source: BEA 2021Q3 2nd release, Philadelphia Fed November SPF, FT-IGM December survey, and author’s calculations.

On unemployment, the median forecast is for a deceleration in recovery,

Figure 3: Unemployment rate (black), November Survey of Professional Forecasters (red), FT-IGM December survey (sky blue square), 90th percentile and 10th percentile implied levels (light blue +), my median forecast (green triangle). NBER defined recession dates peak-to-trough shaded gray. Source: BEA 2021Q3 2nd release, Philadelphia Fed November SPF, FT-IGM December survey, and author’s calculations.

The survey respondents also think that the participation rate will take a long time to return to pre-pandemic levels.

Source: FT-IGM, December 2021 survey.

On inflation, the median is higher than the November SPF mean estimate for 2022 of 2.3% (and Goldman Sachs’ current estimate).

Source: FT-IGM, December 2021 survey.

The entire survey results are here.

Read More

Continue Reading

Government

Over 170 companies delisted from major U.S. stock exchanges in 12 months

  Over the years, United States-based exchanges have remained an attractive destination for most companies aiming to go public. With businesses jostling to join the trading platforms, the exchanges have also delisted a significant number of companies….

Published

on

By

 

Over the years, United States-based exchanges have remained an attractive destination for most companies aiming to go public. With businesses jostling to join the trading platforms, the exchanges have also delisted a significant number of companies.

According to data acquired by Finbold, a total of 179 companies have been delisted from the major United States exchanges between 2020 and 2021. In 2021, the number of companies on Nasdaq and the New York Stock Exchange (NYSE) stands at 6,000, dropping 2.89% from last year’s figure of 6,179. In 2019, the listed companies stood at 5,454.

NYSE recorded the highest delisting with companies on the platform, dropping 15.28% year-over-year from 2,873 to 2,434. Elsewhere, Nasdaq listed companies grew 7.86% from 3,306 to 3,566. Data on the number of listed companies on NASDAQ and NYSE is provided by The World Federation of Exchanges.

The delisting of the companies is potentially guided by basic factors such as violating listing regulations and failing to meet minimum financial standards like the inability to maintain a minimum share price, financial ratios, and sales levels. Additionally, some companies might opt for voluntary delisting motivated by the desire to trade on other exchanges.

Furthermore, the delisting on U.S. major exchanges might be due to the emergence of new alternative markets, especially in Asia. China and Hong Kong markets have become more appealing, with regulators making local listings more attractive. Over the years, exchanges in the region have strived to emerge as key players amid dominance by U.S. equity markets. As per a previous report, the U.S. controls 56% of the global stock market value.

A significant portion of the delisted companies also stems from the regulatory perspective pitting U.S. agencies and their Chinese counterparts. For instance, China Mobile Ltd, China Unicom, and China Telecom Corp announced their delisting from NYSE, citing investment restrictions dating from 2020.

Worth noting is that the delisting of firms was initiated due to strict measures put in place by the Trump administration. The current administration has left the regulations in place while proposing additional regulations. For instance, a recent regulation update by the Securities Exchange Commission requiring US-listed Chinese companies to disclose their ownership structure has led to the exit of cab-hailing company Didi from the NYSE.

Impact of pandemic on the listing of companies

The delisting also comes in the wake of the Covid-19 pandemic that resulted in economic turmoil. With the shutdown of the economy, most companies entered into bankruptcies as the stock market crashed to historical lows.

Lower stock prices translate to less wealth for businesses, pension funds, and individual investors, and listed companies could not get the much-needed funding for their normal operations.

At the same time, the focus on more companies going public over the last year can be highlighted by firms on the Nasdaq exchange. Worth noting is that in 2020, there was tremendous growth in special purpose acquisition companies (SPACs), mainly driven by the impact of the coronavirus pandemic. With the uncertainty of raising money through the traditional means, SPACs found a perfect role to inject more funds into capital-starving companies to go public.

From the data, foreign companies listing in the United States have grown steadily, with the business aiming to leverage the benefits of operating in the country. Notably, listing on U.S. exchanges guarantees companies liquidity and high potential to raise capital. Furthermore, listing on either NYSE or Nasdaq comes with the needed credibility to attract more investors. The companies are generally viewed as a home for established, respected, and successful global companies.

In general, over the past year, factors like the pandemic have altered the face of stock exchanges to some point threatening the continued dominance of major U.S. exchanges. Tensions between the US and China are contributing to the crisis which will eventually impact the number of listed companies.

 

Courtesy of Finbold.

Read More

Continue Reading

Economics

Stock futures open flat as Omicron concerns ease

Dow futures edged up 0.02%, while contracts on the Nasdaq Composite inched up 0.10%…
The post Stock futures open flat as Omicron concerns ease first appeared on Trading and Investment News.

Published

on

Dow futures edged up 0.02%, while contracts on the Nasdaq Composite inched up 0.10%

Stock futures opened relatively flat on Wednesday evening, though sustaining gains posted by a three-day recovery rally that was led by cooled investor concerns around the Omicron variant of the coronavirus.

Dow futures edged up 0.02%, while contracts on the tech-focused Nasdaq Composite inched up 0.10%. All major indexes closed up, with the S&P 500 adding 14.46 points to end the session at 4,701.21, just 0.5% short of the trading session on Nov. 24, a day before the latest COVID-19 variant was announced by the World Health Organization (WHO).

The moves were supported by eased virus fears after Pfizer Inc. and BioNTech reported that early lab studies show a third dose of their coronavirus vaccine mitigates the Omicron variant.

The vaccine makers had indicated the initial two doses may not be enough to protect against infection from Omicron. Shares of Pfizer (PFE) traded 0.62% lower on Wednesday, closing at $51.40.

With virus concerns diminishing, investors are pivoting their attention back to economic data, awaiting Consumer Price Index (CPI) figures on Friday to assess the extent inflationary pressures will persist.

If the Omicron variant was to lead to a resurgence in goods spending at the expense of services or to further complicate supply disruptions, there could be a clear inflationary impact, too, HSBC economist James Pomeroy wrote earlier this week in a research note to clients.

He stated: The inflation news in the past few weeks has been decidedly mixed — with upside surprises in both the U.S. and eurozone being offset by the possibility of some of the supply chain issues starting to alleviate, while energy prices have fallen sharply in recent days.

The post Stock futures open flat as Omicron concerns ease first appeared on Trading and Investment News.

Read More

Continue Reading

Trending