Short-run Economic Effects of Gender Inequality (IPV)

Short-run Economic Effects of Gender Inequality (IPV)

Background

This research paper is based on report published in 2017 by Institute for Women’s Policy Research, “The Economic Cost of Intimate Partner Violence, Sexual Assault, and Stalking”. The purpose of this research paper is to take the subject of IPV in the topic of economic effects of gender inequality and see how it affects the general economy of a country. (The economic effects mentioned in this paper will mostly account only for the short-run economic effects)

Introduction

IPV stands for intimate partner violence and it is violence or aggression that occurs in a close relationship. The term “intimate partner” includes current and former spouses and dating partners. In the case of IPV, this paper will mainly explore the effects of IPV in the United States. Stated by National Coalition Against Domestic Violence, “on average, nearly 20 people per minute are physically abused by an intimate partner in the United States. During one year, this equates to more than 10 million women and men.” IPV can cause problems with mental health, sexual and reproductive health, and potentially lead to death and injury. IPV causes personal economic problems to women individually, which leads to the short-term economic effects to the nation’s economy. The total cost of IPV on United States in 2017 was approximately 9.3 billion dollars.

Higher Medical Costs

Institute for Women’s Policy Research (IWPR) published a paper in 2017 showing the following statistics of what the victims of IPV experience. 41.5% of the IPV assaults lead to physical injury. 28.1% of those physical injury lead to medical treatment. Of those physical assaults, they led to an average of 4,273 dollars, which is a very big burden for most women. Insurance covers some of these costs, but an average of 30% of these costs were paid out of pocket.

 

IPV during Adolescence

According to IWPR and World Health Organization (WHO), women who experienced IPV during adolescence, on average, had 0.5 fewer years of education. This can lead to discouragement in academic works and dropping out of school. 60% of these victims either quit their jobs or were let go from their jobs due to the difficulties experience during career life. Apart from the medical and other expenses, their expected lifetime income losses were averaged to around 52,242 dollars.

 

GDP Formula

 

Expenditure Approach = C + I + G + NX

 

Consumption Formula

 

C = c₁+ c₂Yᵈ

 

Figure 1.

Economic Theory Approach

Figure 1 represents how the GDP of a country is essentially calculated to measure a country’s income and consumption. IPV, from the information provided above, can affect the women who are the victims to lose quite a significant part of their income. In the worst case, they lose their jobs. Under such cases, the compilation of these effects will cause damage in the consumption (C) part of the countries GDP. This is due to the fact that consumption formula shows that the overall income for an individual (Y) has a direct correlation to the consumption (C) measure. C1 and C2 are the marginal propensity to consume (MPC). However, it is difficult to say that MPC will be directly affected because the victims will consume less in relations to the decrease in the losses in income. Therefore, the only index that is affected in the equation is Y and it will decrease overall consumption of the nation in the short-run. However, in the long-run the losses in the jobs will be fill-up with other contestants, which means that the consumption will increase back to its original measures. Nonetheless, the short-run damage is not to be overlooked as it hurts certainly significant part of the society, gender of women.

Reference

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