Firms’ Behavior Under Discriminatory Laws and Women’s Employment in the Democratic Republic of Congo

ABSTRACT

This article contributes to better understanding firms’ behavior in the presence of gender discriminatory laws and its linkages with labor market outcomes for women in a developing country setting. Using data collected through the World Bank Enterprise Surveys in the Democratic Republic of Congo, the study documents the existence of nonnegligible employer discrimination in the presence of discriminatory laws. Interestingly, discriminatory behaviors, and the related limitations in women’s autonomy, are more pervasive outside the capital city, Kinshasa, which suggests that differences in enforcement and social norms may be at play. The study also finds that, in those firms that do not enforce discriminatory laws, women benefit from better labor market outcomes, in terms of their representation among the upper echelons of management and their participation in the overall workforce. The positive relationship between nondiscriminatory behaviors and female employment is particularly strong in the manufacturing sector.

HIGHLIGHTS

• In the Democratic Republic of Congo, discriminatory laws are linked to employer discrimination against women.

• Firms do not follow these laws uniformly, with enforcement varying by geography and type of law.

• This important nuance helps uncover the interaction between national laws and local norms.

• Firms that do not impose discriminatory laws have more women employees and managers.

KEYWORDS:

• Gender
• family law
• labor market discrimination
• women’s labor force participation

JEL Codes:

• K0
• J16
• J21

ACKNOWLEDGMENTS

We would like to thank Nayda Almodovar Reteguis from the Women, Business and the Law unit in the Development Economics and Chief Economist Department of the World Bank for the invaluable collaboration that allowed to design the questions used in the analysis. We would also like to thank Jorge Luis Rodriguez Meza and the participants of the seminar held by the World Bank Africa Region Gender Innovation Lab for very helpful comments. All remaining errors are our own. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

SUPPLEMENTAL DATA

Supplemental data for this article can be accessed online at https://doi.org/10.1080/13545701.2022.2100444https://doi.org/10.1080/13545701.2022.2100444.

Notes

1 See Raquel Fernández (2014) for an overview.

2 See Sanchari Roy (2019) for an overview.

3 We cannot say whether all firms in the DRC were aware of the discriminatory laws considered in our analysis. However, the extensive background work conducted by the World Bank Group before significant reforms were undertaken provides some evidence of firms’ awareness of these laws. For example, copies were obtained of authorization letters, which were signed by women’s spouses, granting permission for them to be hired. Moreover, the fact that firms in the study are all formal firms, and therefore registered with the relevant authorities, makes it more likely that they are aware of the legal environment under which they operate.

4 See Ghazala Azmat and Barbara Petrongolo (2014) for a review of studies on discrimination.

5 Data are not available for earlier years.

6 The figures have hardly changed since 2012. Data are from the World Development Indicators, World Bank.

7 In 2018 these figures were: agriculture: 87 percent; industry: 9 percent; services: 4 percent, based on the World Development Indicators, World Bank.

8 https://ilostat.ilo.org/data/.

9 The data about formal firms operating in the DRC are from a block enumeration conducted in the country prior to the 2013 Enterprise Survey.

10 Firms are defined has having majority woman ownership when the percentage of the firm owned by women is 51 percent or more.

11 The extent of gender-based disparities in the DRC is confirmed by other data sources including the OECD Social Institutions and Gender Index (SIGI), the UN Gender Inequality Index (GII), and the Global Gender Gap report from the World Economic Forum.

12 According to the Family Code that was in place at the time of the survey, upon marriage, a woman would lose her legal autonomy, which would be assumed by her husband. If a woman did not marry or was divorced or widowed, she would retain or regain her legal autonomy.

13 According to ILO definitions, industrial undertakings include: “(a) mines and extractive industries of any kind (mining); (b) undertakings in which goods are manufactured (manufacturing), modified, cleaned, repaired, decorated, finished, prepared for sale, destroyed or demolished or in which the materials undergo a transformation, including shipbuilding, production, transmission of electricity (energy) and motive power in general; construction (construction) and civil engineering companies, including construction, repair, maintenance, processing and demolition.” (Article 1 of “ILO Hours of Work [Industry] Convention,” 1919 (No. 1); https://www.ilo.org/dyn/normlex/en/f?p=NORMLEXPUB:12100:0::NO::P12100_ILO_CODE:C001).

14 Micro firms are normally excluded from the ES universe of inference. However, in the case of the DRC, a survey of micro firms was carried out in parallel with the standard ES.

15 A breakdown of Table 3 by firm location is not provided here but is available upon request.

16 A full list of the gender-related questions is presented in Table A1 in the Online Appendix. Each question was only posed where relevant, as explained in the second column of Table A1.

17 In the following paragraphs we present the results for the questions for which we have a sufficiently large sample to conduct meaningful analysis.

18 The survey also asked questions related to discrimination in hiring decisions. The results reveal some interesting attitudes, for example, 37 percent of firms stated that concerns about family commitments would be a reason for not hiring a married woman. However, we had too few observations to conduct an empirical analysis on these data.

19 Total employment and total women’s employment are defined based on the number of permanent full-time workers in the establishment.

20 Research shows that some sectors are friendlier toward women than others (Islam and Amin 2014; Juhn, Ujhelyi, and Villegas-Sanchez 2014).

21 As part of the robustness check, we attempted two Instrumental Variables estimations (IV) regarding the relationship between workplace restrictions and women’s labor market outcomes. In the first estimation we used two variables as instruments for a firm allowing women workers to perform all work-related tasks: a) whether the firm lists access to finance as the main obstacle to its operations; b) whether the firm identifies tax administration as a major or severe constraint to its operations. We posit that firms facing these constraints may be operating in a more difficult business environment and thus may not be in a position to restrict the tasks that any of their employees perform. The results of these estimations confirm the positive and significant relationship between allowing women to perform all tasks and their labor market outcomes. However, as we are using firm-level variables as instruments for firm-level behavior, we cannot make strong claims as to the exogeneity of these instruments. In the second estimation we used the following instruments (i) Firm identifies access to finance as the main obstacle to its operations; (ii) Average number of visits or required meetings with tax officials; (iii) Firm used financial records to respond to quantitative questions in the survey; (iv) Firm identifies labor regulations as a moderate, major, or severe constraint; (v) Owner is also the manager; and (vi) Firm competes against informal/unregistered firms. These variables capture aspects of the business environment, as well as characteristics of the firm, that may impact its decision to impose restrictions on women workers. Using this wider set of instruments, we again confirm the positive and significant association between allowing women to perform all tasks and women’s employment outcomes. Nonetheless, we do not feel we can make strong causal claims as to the validity of these results given the potential endogeneity between our instruments and dependent variables. These results are available upon request.

22 Islam, Muzi, and Amin (2019) use a cross section of ninety-four economies.

23 Differences by gender in terms of occupation and industry are, according to Francine D. Blau and Lawrence M. Kahn (2017), an important driver of the gender pay gap.

Additional information

Notes on contributors

Marie Hyland

Marie Hyland holds a PhD in economics from Trinity College Dublin; as part of her PhD studies Marie also spent time at the University of Maryland as a Fulbright scholar. She is a member of the Women, Business and the Law team at the World Bank Group. Marie’s work focuses on the economic impacts of legal gender reform.

Asif M. Islam

Asif M. Islam is Senior Economist for the Middle East and North Africa Region of the World Bank Group. His research focuses on private sector development. He has published in peer-reviewed journals on several dimensions of the private sector including entrepreneurship, technology, crime, informality, and gender.

Silvia Muzi

Silvia Muzi is Senior Economist in the Investment Climate Unit of the World Bank Group. Silvia leads the development of analytical work to support private sector development in emerging and developing countries. Her research interests include gender, innovation, and digitalization.