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Abstract
We provide a comprehensive up-to-date review of the large body of theory and evidence on the linkages between trade liberalisation and gender inequality in income, as well as two of the latter's key underlying determinants: wages and employment. On balance, the evidence for developing countries points to an overall beneficial impact of trade expansion on female employment, both relative to male employment and in absolute terms, although largely concentrated in unskilled manufacturing. By contrast, the bulk of the evidence suggests a widening gender wage gap as a result of freer trade.
Acknowledgements
The authors are grateful to Edward Anderson, Sue Fleming, Marzia Fontana and Catherine Locke for comments on an earlier draft. All remaining errors are ours. The research has been funded jointly by the UK Department for International Development and the UK Department for Business, Enterprise and Regulatory Reform. This article was finalised while the first author was on sabbatical leave at the Institute for Environmental Studies, Vrije Universiteit Amsterdam, the Netherlands.
Notes
1. Heterodox trade theories, on the other hand, critique the Heckscher-Ohlin model and its conclusions by emphasising the role of absolute (rather than comparative) advantage in determining trade flows and gender inequalities (Elson et al., Citation2007).
2. In a recent paper, though, Neumayer and de Soysa (Citation2007) suggest that trade expansion itself may positively influence the overall protection provided to women's economic rights. A measure of economic rights is used that extends beyond wage differentials and employment to capture legal and institutional aspects, such as equality in promotion practices, protection against discrimination at work, protection from sexual harassment and the right to work in male-dominated professions (such as the military and police force). Moreover, the measure does not only capture the availability of legal protection but also its enforceability. A doubling of the share of exports and imports in GDP would translate into an improvement by approximately one unit in the 0–4 index of female economic rights (Neumayer and de Soysa, Citation2007).
3. In order to capture such gendered differences in access to production factors, the Gender, Institutions and Development Database of the Organisation for Economic Cooperation and Development (OECD, Citation2009) constructs a 0 to 1 index of women's access to land, bank loans and other forms of property, where 0 indicates full access to resources. Women's access to resources is especially restricted in African and Middle Eastern countries, where the index is well above 0.5. This contrasts dramatically with women's access to resources in developed countries, where the index typically equals 0.
4. In rural areas in Mexico and Tanzania, for instance, husbands often forbid their wives to seek employment outside their households (see Willis, Citation1993 and Kabeer, 1996 respectively).
5. It is worth noticing that there is often a widening wage gap also across women; for example, between skilled and unskilled women in formal employment in Mexico (Ghiara, Citation1999).
6. While state enterprises generally supported gender equality in wages, there is evidence that suggests that in the private sector female wages are more suppressed. Using the 1992 Chinese Labour Market Project data, Maurer-Fazio and Hughes (Citation2002) find that the proportion of the gender wage gap that remains unexplained after controlling for gender differences in productivity is 47.4 per cent amongst private joint-venture firms and less than half, 23.0 per cent, among state enterprises.
7. High-value non-traditional agriculture (for example, horticulture and floriculture) has on the other hand stimulated female labour employment to a certain extent – although often in the form of seasonal ‘buffer’ employment, with men holding the relatively more secure positions (Barrientos et al., Citation2004).
8. For example, male employment tends to benefit more from the expansion of the tourism industry in predominantly Muslim nations (see Tucker, Citation2007).
9. The relative abundance of most African and Asian nations in land and unskilled labour respectively, explains to a large extent why Africa has specialised more in agricultural commodities, whereas Asia inlight manufacturing that depends on manual labour (Wood, Citation1994). Women tend to constitute a disproportionately large share of the unskilled labour force in most developing countries, while men unevenly dominate in terms of land ownership. This disparity in trade specialisation explains to some extent why trade expansion has benefited women to a larger extent in Asia (as unskilled workers, often employed in the garment and textile industry) rather than in Africa, where limited female access to land as well as other factors has hampered their involvement in agricultural exporting activities.