Shaping the ‘she-covery’: Using gender inclusive competition policy to build back better

The unfolding health and economic consequences of the COVID-19 crisis have once again thrown the spotlight on the structural inequalities that women in our society face. As governments and societies reflect on how to recover from the crisis and build back better, OECD’s Chris Pike looks at the contribution gender inclusive competition policy could make.

While COVID-19 has proven more fatal for men, the economic harm has fallen disproportionally on women. There is a grave danger that its enduring legacy may be to set back progress towards gender equality by – yet another – generation.

During the crisis, many women have stood bravely (alongside men) on the frontline in hospitals, care homes, and testing centres, as well as in the supermarkets and schools that we rely upon more heavily than we ever realised. However, many others working in textiles, hospitality and other industries that have been disproportionately affected by the sharp and potentially persistent demand shock have lost their jobs. In addition, many women around the world have been forced to retreat from the workforce to provide unpaid child or elderly care and household work. Of those that have managed to remain, many will have seen their career progression slowed as short-sighted, unenlightened managers become frustrated at even their best attempts to balance work and family life in the context a dramatic and total withdrawal of state support for families. Most will have had to use reduced household incomes to pay higher prices for basic necessities for their families. Furthermore, we can expect that those women brave enough to look towards starting a new business in the aftermath of the crisis will face the usual iniquitous access to credit and investment.

In this context, a strong competition policy can not only be a powerful tool for helping to navigate the COVID-19 crisis and ensuring that the subsequent economic recovery is as fast and sustained as possible. It can also help  governments looking to build back better, by offering a practical and potentially high impact opportunity to drive greater gender equality within markets, and hence to help deliver a stronger, fairer and more resilient economic recovery. Recent OECD work shows that using a gender lens can strengthen competition policy, and that a more effective competition policy can in turn help to address gender inequality.

  1. Better enforcement -The OECD’s research suggests that competition agencies and sector regulators that adopt a gender lens can improve the accuracy of market definition, the effectiveness of consumer remedies, and the success of whistleblower programmes. A gender lens can help to identify gender differences in the behaviour of consumers, workers and entrepreneurs. Incorporating these differences in the economic analysis can lead to agencies making decisions that better protect the interests of women.  For example, a gender lens may result in agencies defining markets for products that are targeted at women. They might then assess to what extent those markets have been affected by COVID-19; whether a conduct in those specific markets might be harmful to competition; and which remedy may be effective to restore competition in a sustainable manner.
  2. Targeted market actions – By investing in a gender inclusive competition policy, governments can make a real difference to gender inequality. Most importantly, such a policy could increase availability and affordability in key markets for women. Three initial focus areas could be: market substitutes for unpaid child or elderly care and household work, the burden of which was already carried by women around the world, and which has significantly increased as result of COVID-19; the credit and investment markets that facilitate women’s entrepreneurship; and those markets in which the products are largely consumed by women, such as childcare or gender-specific products.
  3. Diminished pay gaps – An inclusive competition policy can also help to reduce the gender pay gap. For instance, more effective competition can reduce the scope for gender-based discrimination by employers. Meanwhile competition agencies that are willing to challenge mergers and agreements that create monopsony market power (and the abuse of such power) can help to prevent women’s pay from being squeezed and their working conditions worsened.[1] Such actions can prevent firms from exploiting women’s lower wage elasticity. This elasticity will, as for men, have been worsened by lockdown restrictions, but is already lower as a result of women having less geographic mobility due to factors such as restrictions imposed by their partner’s career and less time flexibility due to care commitments (which have increased during the crisis).
  4. Better advocacy – Competition agencies, particularly in less developed countries, can also use the risk to growth that is posed by the COVID-19 crisis to advocate for action against anticompetitive regulatory barriers to entry created by government or by professional associations. Barriers include those that protect less efficient male entrepreneurs and their businesses from the threat of women entrepreneurs who are starting potentially more efficient firms, as well as those that protect a large informal sector.[2] Agencies can for instance, advocate for the removal of gender-specific mobility restrictions that make it difficult for women to switch jobs and hence increase the monopsony market power of employers. Agencies can also make the case for more diversity on boards, not because it is fair (though it is), but because it can improve compliance with competition law and hence help drive growth.

By increasing the inequitable distribution of unpaid work within households, and further reducing the elasticity of women’s labour, the COVID-19 crisis has only intensified the vulnerability of women to untamed monopoly and monopsony market power. The need for a gender inclusive competition policy is therefore stronger than ever if we are to limit the “she-cession”, ensure that there is no “he-covery”, and instead create the type of inclusive and sustainable growth and shared prosperity that has been lacking for far too long. As part of its Gender Inclusive Competition Policy project, the OECD is further developing this research to produce a toolkit for competition agencies looking to embed gender considerations within competition policy to help to tackle gender inequality.

OECD Gender Inclusive Competition Policy Project

Gender and Competition Session at the 2018 OECD Global Forum on Competition

Competition policy responses to COVID-19

[1] See for instance, recent evidence that more than 30% of pregnant key workers in the UK have been told to start maternity leave early during COVID-19, while working parents were more than twice as likely to be furloughed.

[2] Note that barriers to entry for firms in the formal economy might include a lack of enforcement against those in the informal economy that undercut them by not complying with the same duties to provide employment protection (thereby reducing their costs).

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