By Prashansa Srivastava
Promotion of gender equality and empowerment of women has been one of the fundamental goals of the international community under the aegis of the United Nations. With the Trade and Development Report of 2017 by the United Nations Conference on Trade and Development (UNCTAD) discussing gender inclusivity and trade in detail, it is starkly evident that creation of greater employment opportunities for women is crucial for the achievement of this goal.
Role of gender inclusivity in employment
Participation of women in productive employment plays an instrumental role in the achievement of several other goals of the United Nations such as ending hunger and poverty, reducing child mortality, improving maternal health, and attaining universal primary education. A number of studies show that having an independent source of income gives women greater bargaining power within the household, which in turn leads to better health outcomes for children. However, in a world of hyper-globalisation, how can trade be used to stimulate the higher participation of women in the labour market? Greater integration of the domestic market in the international market improves a country’s export competitiveness and growth through efficient resource allocation, greater specialisation, and more competition. These changes, in turn, are likely to exert major impacts on employment and other labour market outcomes, which could be gender differentiated.
Role of trade liberalisation
There is a scale effect which arises due to trade liberalisation, ceteris paribus. It causes an overall expansion of output and employment. However, when seen in the context of cost reduction and technology, there may be differing impacts of trade liberalisation on female employment.
When a country opens itself to more trade and reduces barriers, firms face higher competition. In the face of this competition, they are more willing to employ female workers. Though they are paid far less than men and made to work longer hours. Post-1991, a hike was seen in the number of women employed in the unskilled labour-intensive sector. However, it must be kept in mind that even though the number of females engaged in the workforce increase in a liberalised economy, their incomes may not necessarily increase by the same amount. The incentive of cost reduction may thus, in fact, exert a negative influence on the condition of women.
Trade liberalisation may also fail to exert a positive influence if the technology effect dominates. The technology effect is when industries faced with such extreme international competition must utilise capital-intensive technologies instead of labour intensive. With male unskilled workers typically having a higher level of education than female unskilled workers, technology-related factors may force females out of the workforce replacing them with male workers. This can be seen from the fact that after 1991, female employment increased in labour-intensive industries areas such as export industries and declined in capital-intensive industries such as manufacturing. While trade expansion has the potential to contribute to inclusive growth and development by increasing access to foreign-produced goods and contributing to additional sources of demand, unfettered import competition can compromise local manufacturing and the job opportunities that go with it, with negative consequences for gender equality.
What must be done?
UNCTAD’s Trade and Development Report of 2017 recognises the problem of gender segregation in a more globalised world and offers a number of solutions that can be undertaken to prevent this disparity. The report highlights the fact that simply promoting economic growth on a macro level, will not on its own bring about inclusive development. This failure can be remedied only by lowering gender gaps in education itself. This will have the most positive and long-term impact, especially in the case of developing countries. In the short run, countries that face huge inequalities should undertake public policies that provide some protection against import competition. An expansive fiscal policy also contributes to inclusion by increasing labour demand in ways that reduce job competition, thereby increasing women’s industrial employment.
Combating gender stereotypes and otherwise fostering and facilitating women’s access to core sector employment, especially through social infrastructure investments that better enable women to combine paid work and their responsibilities for care, are important interventions to consider. Pairing such efforts with demand-side interventions, including through more expansive fiscal stances, can increase the demand for labour and make growth more gender inclusive. In trade, the domestic value must be added and the threat of competition should not undermine workers’ rights or force industries to favour one gender over the other.
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