Beyond participation: Why where women work matters

For developing countries striving for stability, resilience, and sustained growth, simply getting more women into the workforce isn’t enough. Our new analysis across 125 developing countries shows a critical, often overlooked aspect: where women work profoundly shapes a country’s ability to diversify its exports and withstand shocks. Policy implications are evident—when more women work in industry (rather than predominantly in agriculture), countries tend to diversify their export baskets more rapidly and become less vulnerable to volatility. In other words, enabling women’s entry into higher-productivity industrial roles is not just good for inclusion, it is a practical engine for economic transformation.
 

Understanding the Challenge

Export diversification is widely recognized as a pathway toward economic stability, especially for developing economies vulnerable to commodity shocks. Yet most developing countries still depend heavily on a narrow range of export products, often in the primary sector. Standard policy advice focuses on trade infrastructure, investment climate, or regional integration. But how labor markets, especially for women, feed into this process remains under-researched. Our study aimed to fill this gap by asking: Can the structure of female employment influence a country’s ability to diversify exports? And if so, which sectors matter most?
 

How We Did It

We combined labor force and trade data across 125 developing countries between 1991 and 2018. Export diversification was measured using the Herfindahl-Hirschman Index (HHI) —a measure where higher values indicate more concentration (less diversification), and lower values indicate greater diversification. Our key variables were the sectoral shares of female employment in agriculture, industry, and services. We used panel regression models with country-fixed effects and several robustness checks, including instrumental variables, to control for potential endogeneity. This allowed us to isolate the effect of female employment composition from broader economic trends or governance factors.
 

What We Found

• Industry Drives Diversification:  Countries with higher shares of women employed in industry consistently had lower export concentration, suggesting more diversified export baskets.
• Agriculture Maintains Concentration: In contrast, countries where women were mainly employed in agriculture had higher export concentration, remaining reliant on a few commodity exports.
• Ambiguous Role of Services: Employment in services had an ambiguous impact, statistically weak and less consistent across specifications. This may be due to the heterogeneity within service sectors, where informal and low-productivity jobs are prevalent in many low-income economies.
   

Figure 1. How Sectoral Female Employment Affects Export Concentration

A Deeper Look: Women in Science and Innovation

We went further by exploring how women’s participation in scientific research, especially in engineering and agricultural sciences, modulates this relationship. Drawing on UNESCO data, we assessed whether the share of women researchers amplified or dampened the impact of sectoral employment on diversification.

The patterns in the figure 2 below reveal two important insights.

• Complementarity with Innovation: Countries where more women work in industry or services also tend to have a higher share of women engaged in scientific research, suggesting a strong complementarity between productive employment and innovation participation.
• Science Strengthens Diversification: Higher female representation in science especially in engineering and agricultural sciences, is associated with lower export concentration. This implies that empowering women in research strengthens the link between industrial employment and export diversification.
   

Figure 2. Correlations between female employment, scientific research, and export concentration

The Bangladesh Case: A Real-World Illustration

Bangladesh offers a compelling real-world case. Over the last three decades, the country’s export profile has shifted dramatically, from raw jute and agricultural products to ready-made garments. This transformation was underpinned by the mass integration of women into factory work. Female employment in the garment sector was not only a source of income and empowerment it was a driver of industrial takeoff and export diversification. As millions of women transitioned into formal manufacturing jobs, they became part of a new economic engine that elevated Bangladesh’s position in global value chains.
 

What This Means for Policy

The implications for policymakers are clear. Efforts to promote export diversification must go beyond trade and infrastructure. They must include women-focused labor and innovation policies that enable women to enter and thrive in high-value sectors. This calls for:

• Expanding girls’ access to STEM education and technical training, to prepare them for jobs in industry and research.
• Reforming labor markets to make industrial jobs accessible and safe for women, including addressing social norms, workplace safety, and childcare needs.
• Building inclusive research systems that engage women in driving innovation and technology adoption, with targeted support for women in engineering and agricultural sciences.
• Learning from countries like Bangladesh, where targeted policies and industry partnerships have successfully integrated women into high-value sectors.
   

Why It Matters

Our research contributes to ongoing debates on inclusive growth and structural transformation by highlighting the sectoral dynamics of female employment as a lever for diversification and resilience. Linking women’s employment patterns with trade outcomes offers a clear takeaway for policy makers, trade strategists, and advocates for women’s economic empowerment: to build more resilient, innovative, and inclusive, look beyond participation and focus on where women work.