3. Gender and Trade: from inequality towards equality? Irene van Staveren Associate Professor of Feminist Development Economics, Institute of Social Studies

4. Labour market flexibilisation:  Reduction of wage controls and fixed contracts  Increase in casual labour, part-time labour, sub- contracting of production, homework  Reduction in minimum wages, labour standards, workers protection  Globalization has lead to feminization of employment, particularly in export sectors (1970’s- 1990’s). Income insecurity for households => increase in female labour supply

5. FLEXIBILISATION AND FEMINISATION OF LABOUR IN TRADE  The asymmetry hypothesis of female employment losses and trade: –North-South trade has increased the female employment share in manufacturing in the South but not decreased the female employment share in manufacturing in the North  Challenging the asymmetry hypothesis: not true when using more recent data and factor content analysis –North-South trade does disproportionally affect women’s manufacturing employment in the North –Reason: trade affects in particular female intensive sectors (textiles, leather, apparel)

6. Gender wage discrimination and trade  Trade economist Bhagwati: globalisation increases competition, which in turn reduces labour market discrimination But statistics: not true  Feminist macroeconomist Seguino: GDP growth in export-oriented developing countries depends on gender wage inequality –Evidence from Asia: the higher the gender wage gap the more exports and the higher GDP growth –Diagram from: Stephanie Seguino, ‘Gender Inequality and Economic Growth: a Cross-Country Analysis’ World Development, 28 (7), 2000: 1211-1230); and Feminist Economics, 2000.

8. Explanation of diagram:  The gender wage gap stimulates labour intensive manucfacturing exports in two ways: –lowering the product price through low female wage costs –increasing profits and hence the budget for purchasing new technology abroad

9. Gender and Trade: a two-way relationship at 4 levels:  International governance –OECD guidelines for MNCs: make gender more explicit –WTO: gender blind -> connect to women’s organisations that lobby for gender dimension in WTO, such as IGTN (International Gender and Trade Network) –Bilateral trade agreements: EU has a rule on ensuring gender equality in all policy areas, which includes trade: refer to this when lobbying EU on social impacts of trade  Multinational firms –In OECD countries: OECD guidelines –As global buyers in value chains: outsourcing and subcontracting to casual labour through middlemen and to the informal economy with two opposed effects on gender equality: More employment for women Low wages for women and unfavourable labour standards –CSR policy should include informal sector suppliers –HRM policies: affirmative action, equal wage for equal work  Governments in developing countries –Not excluding Export Processing Zones from labour law (minimum wages, no discrimination) and gender policy  Households –Home work: risk of child labour involvement due to low piece rates and strong time pressure for production –Start of an (international) care chain which may affect care for children –Women’s income leading to empowerment? YES if backed up by gender equality laws, gender equal social norms, and a strong civil society NO if not (unequal family law, widespread practices of wife beating, polygamy, non-pooling of income between husband and wife)

10. A Gendered Prebisch-Singer Hypothesis (Shaianne Osterreich) :  Terms of Trade (import prices/export prices) decrease for developing countries  P-S Hypothesis: decreasing terms of trade for South are due to less bargaining power of workers in the South to claim wage increases with rising productivity  Empirical study 1975-1995 cross country data: –Decline of labour market discrimination of women in South relative to labour market discrimination of women in North –Associated with improvement of terms of trade for South Terms of trade will be helped by reducing discrimination (raising women’s wages and hence the product price)

11. Gendered Job Vulnerability (Sule Ozler) :  Plant level data 1986-1996 Turkey on job creation and job destruction under trade  Job creation was higher in export sector in particular for unskilled females  Job destruction was higher for females (see next slide)  Gross job reallocation rate was higher for females Job vulnerability was higher for women than for men with Turkey’s export-led growth strategy

12. Table 9.8 Gender differences in job creation and destruction (1)(2)(3)(4)(7)(8) Un skilled female Un skilled male Skilled female Skilled male Ratio (1)/(2) Ratio (3)/(4) A. Job creation Import-competing59.2467.0440.8359.140.880.69 Export67.5265.8842.8456.581.020.76 Non-competing60.9966.6034.9753.500.920.65 B. Job destruction Import-competing85.4279.6890.7682.661.071.10 Export83.1580.1592.0182.651.041.11 Non-competing83.7481.6994.3883.211.031.13

13. Does Import Competition Reduce Gender Inequality? (Ebru Kongar) :  US data 1976-1993 at industry level, comparing concentrated and competitive manufacturing industries (biggest 4 firms <40% market share).  Measure: gender wage gap that is not justified by differences in education  Finding: reduction of gender wage gap with declining manufacturing employment  Explanation: not expected trade theory mechanism of competition driving down discrimination but structuralist effects along gender lines: –Competitive industries: increase of female share of production employment (cheaper labour) and decline in female wages -> more-cheap-labour strategy –Concentrated industries: strong reduction of production employment, so that the remaining female workforce (office jobs) bring up average female wages, reducing the gender wage gap -> more-skill-intensive-production strategy Free trade doe not necessarily remove price discrimination, but can re-enforce segmented quantity adjustments

14. Policy options: social clauses, codes of conduct, decent work (Stephanie Barrientos) :  Social clauses: limitation is that they put the onus for workers’ rights on exporting country governments whereas many value chains are dominated by Northern-based multinationals  Codes of conduct, however, emphasize companies’ reputation and ignore women’s employment conditions in subcontracted informal sector  ILO’s Decent work approach is all-encompassing but its instruments are limited to dialogue and persuasion, whereas WTO has legal force

15. Potential macro economic benefits of investment in gender equality in the labour market:  If sub-Sahara Africa had the same female/male ratio in education as East Asia, its GDP per capita growth over the period 1960-1992 would have been 0.5 percentage points higher (from 0.7% to 1.2%).  Additionally, the subsequent formal sector employment growth would have increased GDP per capita with another 0.3%. So, with less gender inequality in HRD and employment, sub-Sahara Africa could have had a GDP per capita growth over three decades of 1.5% per annum, which is double the actual growth rate between 1960 and 1992. (Data from: M. Blackden and C. Bhanu, Gender, Growth, and Poverty Reduction. Washington: World Bank, 1998. Technical Paper no. 428).

16. Gender mainstreaming in Fair Trade initiatives  Guaranteed minimum prices (for farmers) or wages (in manufacturing) particularly help female workers because they are among the lowest paid workers  Gender-aware labour standards: f.e. regulation and enforcement of sexual harassment policy, health package including voluntary family planning information/materials  Gender-equality in wages, employment, promotion, governance as an explicit fair trade certification criterion  Community investment by fair trade buyers in women’s projects and gender equality projects  Involvement of small scale producers rather than big plantations, because this tends to increase the share of women workers benefitting from fair trade and the extent of empowerment of women