Gender

From Raj Nallari and Breda Griffith's lecture notes. This week we finish our series on Gender and Macroeconomic Management.

Empirical Evidence on Impact of Globalization on Women (and IV)

Gender differences during financial crises

There is some evidence from United States and some developing countries that women are more risk averse than men in investing their pension contributions (Bajtelsmit and Bernasek, 1996; Bajtelsmit and Van Derhei, 1997; Hinz, McCarthy and Turner, 1996). While studies on gender impact of financial crises are limited, evidence from both Indonesia and the Philippines show that as men became unemployed, the amount of work done by women increased (women as shock absorbers).  Frankenberg, Thomas and Beegle (1999) estimated that during the financial crises of 1997-98 in Indonesia, employment decreased by 1.3 per cent for women, while for women it increased by 1 per cent.  When unpaid work is also included, there is an increase for both men and women, but for men the increase is only 1.3 per cent, while for women it is 7 per cent.  During the financial crisis of South Korea in 1997-98, employment declined by 3.8 per cent for men and 7.1 per cent for women (Lee and Rhee, 1999).
 

Gender and Migration

 From Raj Nallari and Breda Griffith's lecture notes.

Empirical Evidence on Impact of Globalization on Women (II)

Trade-related gains.

Trade-related gains in employment for women in developing countries have occurred in export processing zones (EPZs), subcontract work for larger firms and in the informal sector.   In all of these, women’s employment is characterized by long hours, job insecurity and unhealthy working conditions, as well as low pay.

In Ecuador, flower-exports increased and women benefited. In Bangladesh, about 2 million jobs were created in textiles and apparel industry, majority of workers are women.  However, trade openness implies that imports of goods and services would also rise and women who are in the import-substitution industries could lose jobs (e.g. as happened in small farming agriculture in Sub-Saharan African countries where women had to compete with cheaper imports).

As shown in the following graph, share of women employed in export manufacturing in selected East Asian countries is larger compared with women’s employment in other manufacturing. This re-confirms that trade openness contributed to employment of women in selected countries for which data is available.  In other words, employment in import-susbstituting manufacturing did not create as many jobs as in the export manufacturing sector.  But, what about the wage rates in export and non-export manufacturing?  Next week we will look at the gender wage gap.

As usual on Fridays, from Raj Nallari and Breda Griffith's lecture notes.

 Impact of Globalization on Gender

Globalization is defined as the increasingly free flow of ideas, people, goods, services, and capital across countries, both North and South. It therefore deals with policies related to trade, finance, flow of information, technology, management know-how, outsourcing of jobs, and immigration and remittances. As a result of globalization, the difference between local and international markets is blurred, and this is impacting upon the structures of employment and a host of other institutions, including household structure and relationships. There are three main hypothesis as to why and when women find more employment opportunities: (i) during periods of labor shortages as during economic expansions only to be released during recessions (buffer or reserve army hypothesis), or (ii) during periods when output in the sectors in which women are over-represented could be rising more rapidly than output in rest of the economic sectors (segmented market hypothesis) or (iii) over time women gradually replace males into what until then were ‘"male jobs" (substitution hypothesis).

Transmission mechanisms

There are several transmission channels through which globalization impacts upon the living standard of both men and women. It is not possible to detail the complex interactions between all the elements of globalization and impact on women but a few observations are in order:

From Raj Nallari and Breda Griffith's lecture notes.

Competitive Exchange Rates

If the central bank is able to maintain a competitive exchange rate, it may help offset some of the gender bias observed during contractionary inflation-reduction by Braunstein and Heintz (2006).  The underlying reason for this effect is that in many countries the growth of women’s employment, particularly formal employment and wage employment, has tended to be concentrated in tradable sectors and a real depreciation of the exchange rate favors tradable sectors and could help protect women’s employment. To reiterate, Braunstein and Heintz (2006) find empirical evidence that real exchange rates appear to have an impact on the gender bias observed in contractionary inflation-reduction episodes. As discussed last week, in the majority of cases of 51 inflation episodes that they observed, women’s formal employment was disproportionately affected by the slowdown in employment growth. However, about a third of the time, the ratio of women’s to men’s employment actually improved when compared to its long-run trajectory. In each of these cases, the real exchange rate either depreciated or showed no deviation relative to its long-run trend.