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Fridays Academy: Gender and Macroeconomic Management

Ignacio Hernandez's picture

From Raj Nallari and Breda Griffith's lecture notes.


Empirical Evidence on Impact of Globalization on Women (III)


Gender wage gap

Oostendorp (2004) provides a cross-country study of the impact of globalization on the occupational gender wage gap using data from International Labor Organization’s data set on gender wage gap for the period 1983–99 in 161 narrowly defined occupations in more than 80 countries around the world and finds that:

(i) the occupational gender wage gap appears to be narrowing with increases in GDP per capita;

(ii) there is a significantly narrowing impact of trade and foreign direct investment (FDI) net inflows on the occupational gender wage gap for low-skill occupations, both in poorer and richer countries, and for high-skill occupations in richer countries;

(iii) there is no evidence of a narrowing impact of trade, but there is evidence of a widening impact of FDI net inflows on the high-skill occupational gender wage gap in poorer countries;

and (iv) wage-setting institutions have a strong impact on the occupational gender wage gap in richer countries. 

Further, higher levels of manufacturing FDI may be associated with a feminization of the labor force.  However, this simple correlation could be that the same factors driving feminization also drive FDI.  Therefore, it is important to assess the differential effects of FDI on male as well as female employment. In FDI increases employment and real wages for both male and female, it would have an important role.  If, however, feminization comes with male unemployment, then the net benefit to women is ambiguous as women take on greater financial responsibility for their families in the face of male unemployment.


Informalization, Part-time work, Self Employed and Consultancy.  

In all parts of the developing world, informal employment and output is on the increase. Beneria (2001) views formal and informal sectors as complementary to each other.  In Africa, for example, the informal sector is in the range of 40-50% of GDP in each country.  Women form a majority of the informal workforce in the developing world (Benería 2001), partly because their gendered responsibilities in the home and persistent gender inequalities in education and the formal labor market confine women to the most flexible and poorly paid industries.  Low labor costs may be one reason for outsourcing of services to developing countries such as India and China. Employment becomes a perpetual source of instability, and women workers are largely left out of the gains won by unionization and the imposition of labor standards in the formal sector.  In its search for higher and higher return, trade and financial flows are going to least cost and high return destinations.  As a result of excessive reliance on market-orientation, there is growing evidence that men and women, in striking a balance between work and life, and while striving for improving quality of life for members of households, are juggling 2-3 jobs, often low-paying, part-time jobs with little or no job benefits.  Union membership in such jobs is low or non-existent.