1 Gender and Economic Opportunities in ECA: Has Transition Left Women Behind? Pierella Paci Washington January 24, 2008

2 Gender: Why is ECA different? Egalitarian ideology of the pre- transition era:  Small gender inequalities in standard indicators; Principle of ‘gender blindness’ in policy making;.. But the veneer of gender equality was thin and easily damaged by a decade of ‘transition’;  Evidence of increasing inequalities of opportunities.  Need to focus on trends rather than level of indicators

3 Gender: Why is ECA different? CA – and Azerbaijan - is the only part of the World Bank ECA region where there was a clear women disadvantage at the begin of transition.  In other parts of the region emerging gender inequalities had both female and male dimensions.

4 Areas of concern (Women) Discrimination in formal labor market increased with transition and growth of informal market increased women’s vulnerability; Barriers to access to land, credit and lack of entrepreneurial skills prevented women from taking advantage of privatization and economic liberalization.

5 Areas of concern (Women) Social protection reforms had negative side-effects for women  Women’s vulnerability increased and  Human trafficking a growing phenomenon. In CA and Azerbaijan girls’ school enrolment falling. Reproductive health a growing concern (esp. for poor) Increase in the “double burden” and “time poverty”.

6 Areas of concern (Men) In some countries –Boys dropped out of secondary education at faster rates than girls; and –Men lost jobs faster than women Without shift away from male-breadwinner model  –Rising alcoholism, suicide and violence –Sharp fall in life expectancy –Family breakdowns and social exclusion –Linked to sharp drop in employment Migration and the tale of the ‘missing men’.

7 But women Disadvantaged in Formal Labor Market Remained Relatively Low Across the region women’ participation in the labor market was, and remained, high by international comparison; Share of women in total employment was high and increased in nearly two thirds of countries share increased –Only in Moldova dropped in early 1990s; Gross pay gap declined slightly over transition.

8 However …. Post-2000s surveys raise some concerns over Central Asia (Tajikistan and Kyrgyz Rep.); The unexplained component of the gender gap high by international standards  Evidence of discrimination and labor market inefficiency

9 Labor Market (1)

10 Labor Market (2)

11 Adjusted Gender Pay Gaps in Selected Countries CountryYearTotal‘Explained’‘Unexplained’ Poland Hungary Bulgaria Romania Russia Ukraine Serbia

12 Focus on Wage Gap A sizeable pay gap exists in most transitional economies; Contrary to established capitalist economies, a large part of the differential is not accounted for by differences in productive characteristics of men and women;  Substantial gender discrimination There is a mild consensus that the net gender pay gap either remained stable or contracted over the transitional decade.

13 A word of Warning However, the magnitude of the unexplained effect could be grossly over-stated if –female labour force experience is poorly measured and/or –the wage equations provide inadequate fits to the data. The improvement in relative wage may be due to the selective withdrawal from the labour market of more poorly qualified females –1% fall in the participation rate  half a percentage point drop in the ceteris paribus gender pay gap (Paci and Reilly, 2005).

14 But not all the women are the same The net adjusted gender pay gaps appeared to widen with movement up the conditional wage distribution  A ‘glass ceiling’ appears to exists for women in the labour markets analysed here.  It is important to go beyond averages.

15 Informal Labor Market Available data do not allow firm conclusions on gender differentials in participation, earning and working conditions in informal labor market. However, labor market segregation is increasing. This is not in itself a concern as informal labor market may provide flexible employment for women. However, better knowledge, careful monitoring of the working conditions and workers’ vulnerability in this market is required.

16 The emerging concern The high degree of unequal treatment in ECA LM is a concern for reasons of –Equity: i.e., unequal treatment of men and women = discrimination; –Efficiency: gender wage differentials (unexplained by differences in productivity) reduce LM efficiency and threaten growth potentials. The threat is particularly severe as the gap is highest for women with highest productivity potentials. The high degree of LM liberalization experienced over transition has had only a mild effect on the extent of unequal treatment.

17 Gender and Income Poverty Available information does not allow comparing individual poverty risks; No evidence that female headed households more likely to fall into poverty than others, once differences in individual and household characteristics are taken into account; Only in Georgia and Tajikistan is the gender of the household head per-se correlated with income poverty.

18 But …. What Keeps Female Headed Households Out of Poverty? Remittances and inter-household transfers: - Increased substantially over the last decade but for how long? Pensions: - Current shift to contributions and work histories as basis  Reduce women’s advantage. Shift to informal labor market.  Reduced pension coverage, but no signs of gender bias. Family benefits: - Value declining steadily over time. Conclusion:  The potential for increased vulnerability are a concern.