GLOBALIZATION AND GENDER INEQUALITY
So far we have analyzed the relationship between globalization and interpersonal inequality without regard to the gender of the persons. Indeed, gender was not present in the classical developments in attempts to link trade theory to theory of income distribution.
However, in the past quarter century this issue has come to the fore strongly in the policy and analytical literature. The analytical reasons for this development are related to greater evidence on gender dimensions of inequality and the development of nonunitary models of the household, which allows for the prospect of unequal outcomes within the household. The policy reasons are related to strong debates on whether the global integration of the past 25 years has hurt or helped women.It is well established that there is a strong gender dimension to interpersonal inequal- ity.[342] This is most easily demonstrated empirically for variables that can be quantified at the individual level. Patterns are country specific, of course. However, in many developing countries, educational attainments are lower for women than for men and especially so at lower incomes. Sex ratios at birth in some countries reveal discrimination against women in sex selection, and maternal mortality rates in many developing countries are at the levels that Sweden attained in 1900. Women earn less than men for similar work, but also women tend to work in sectors and occupations that are low paying.[343]
It is not easy to measure the magnitude of gender inequality along the standard dimension of consumption, because consumption data are usually collected at the household level in surveys. The first cut of measuring gender inequality by inequality between female-headed households and male-headed households is unsatisfactory for obvious reasons. The standard assumption in translating household level information into individual level well-being is to simply divide by household size and allocate per capita consumption of the household to each individual in the household.
Of course, this suppresses all intrahousehold inequality including gender inequality. Thus, our standard measures of inequality are underestimates of true inequality because they set gender inequality in consumption within the household to zero. On rare occasions when individual level consumption data is available (for example on food consumption), it has been shown that the standard procedure understates inequality (and poverty) by as much as 25% (Haddad and Kanbur, 1990). Thus, gender inequality, as reflected in intrahousehold inequality, matters.While it is accepted that gender structures inequality in an economy, there is less consensus on how exactly globalization interacts with this structure. How is the standard analysis of openness and inequality, for example, affected by structuring the economy along gender lines? And, overall, does globalization reduce gender inequality, or increase it?
Before looking at some evidence, let us consider how standard theoretical arguments on globalization and inequality could be modified by taking into account the gender dimension of production and income distribution. A standard piece of analysis in open economy macroeconomics is the effect of devaluation on the balance of payments. As is well known, the transmission mechanism is through “expenditure switching” brought about by raising the price of tradables relative to the price of nontradables. The distributional consequences of this have been analyzed in the usual way through the Stolper- Samuelson theorem. If tradables are relatively more intensive in their use of labor, then the relative return to labor will rise. Indeed, this was the argument made by many for the pro-poor and progressive aspects of devaluation.
However, suppose that tradables are actually more intensive in their use of male labor. Then, it is seen that male earnings will be favored. This should not matter much if there is perfect income sharing within the household—the representative household would gain overall if the policy of devaluation was efficient for the economy as a whole.
However, if the household is not described by a unitary model, and if, for example, there is bargaining between the man and the woman and their outside options matter for the outcome of bargaining, then, the macro policy of devaluation will have the micro consequence of strengthening the bargaining power of males and will have a type of impact on inequality not contemplated in the classical analysis.[344] Of course, the outcome is context specific—it depends on which sector is male or female labor intensive. The main theoretical point, however, is that gender matters (Haddad and Kanbur, 1994).The above is in terms of the pure demand for labor. However, there is also evidence that women are paid less for the same job. The impact of globalization on such wage differentials is uncertain. On the one hand, there is the standard argument that greater global competition will reduce the scope for discriminatory wage practices, and this should narrow wage differentials. However, to the extent that mobility of capital reduces bargaining power of workers, and to the extent that women are concentrated in industries where capital is more mobile, greater openness will lead to lower female wages (Seguino, 2007). The effects of this competition in footloose industries might be seen not just in standard wages but also in labor standards (Chau and Kanbur, 2003, 2006). Again, to the extent that women are disproportionately employed in such industries, the impact of globalization will affect them disproportionately.
There are two main empirical strands of the gender and globalization literature. The first is focused on the effects of openness on demand for female labor and on female wages. The second is related to the previous section—how crises affect women relative to men. We take up these strands one at a time.
The effects of opening up on the demand for female labor are nuanced and context specific. On the one hand, the demand for female labor rises through expansion of light manufactures.
As the World Bank’s World Development Report on Gender notes:In the Republic of Korea, the share of women employed in manufacturing grew from á percent in 1970 to around 30 percent in the 1980s and early 1990s.... Similarly, in Mexico, female employment in manufacturing grew from 12 percent in 1960 to 17 percent in 2008, with 10 times more women in 2008 than in 19á0.
World Bank (2011, p. 256)
However, this phase contrasts with the next phase as there is a move to the production of more capital intensive goods (Seguino, 2013; Tejani and Milberg, 2010; Van Staveren et al., 2007). What about female-wage differentials? Here again, the evidence reflects the conflicting forces, which are resolved differently in different countries. As Seguino (2013) notes in her overview:
Evidence of the impact of trade and investment liberalization for gender wage equality is also mixed. Some studies show that gender wage differentials have declined, in large part due to narrowing educational gaps. But in several developing countries, including China and Vietnam, however, the discriminatory portion of gender wage gaps has increased. (p. 15)
A final, newly emergent strand of the literature provides a gender perspective on the selection and heterogeneity models discussed in Section 20.3. The argument put forward byJuhn et al. (2013) builds on the idea that more productive firms enter into export and modernize technologies. Ifnew technologies require less physical strength (the “brains” vs. “brawn” issue, as it is characterized in some circles), we would expect that demand for female labor would rise in blue-collar occupations and not in white-collar occupations. This is because new technology can change the “brain/brawn” mix in blue-collar occupations, but white-collar jobs will be unaffected on this score. The authors find that for Mexico, post-NAFTA tariff reductions are associated with rising female employment and wage shares in blue-collar jobs but not in white-collar jobs.[345]
The various contradictory forces are also highlighted in Bussolo and de Hoyos (2009).
On the basis of their studies of Africa and Latin America, they conclude, essentially, that with forces pulling in opposite directions, the net effect of trade openness on gender inequality may well turn out to be fairly weak:Overall, the messages of this volume are very clear: trade expansion exacerbates gender disparities in agricultural-based, African economies and reduces it in manufacturing-based economies like Honduras.... Admittedly, the magnitude of the links between trade shocks, producer prices, male versus female bargaining power, consumption decisions, future growth and poverty reduction does not seem too large....To conclude, trade liberalization brings important gender effects, but the evidence collected here shows that these effects tend to be of a small and sometimes uncertain magnitude.
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While the literature on the trade effects of globalization on gender inequality thus renders a relatively neutral verdict, the same is not true of the literature on the impact of economic crises on women. The effects of economic downturns generally, and economic collapses in particular, are argued to be felt most sharply by women because they tend to be displaced first. In turn, they crowd into the informal sector, pushing down earnings further in that sector, which is in any case disproportionately female in employment (Braunstein and Heintz, 2008; Takhtamanova and Sierminska, 2009). It is further argued that the fiscal retrenchment that accompanies economic crises affects women disproportionately both directly and indirectly, through reducing public services that support women’s work, such as health and child care (Seguino, 2013).
There is, finally, an intriguing and important, yet unresolved issue of the effects of globalization on societal norms that determine the structure of gender inequality. Based on the work of Kabeer (1997, 2000) and Hossain (2011), World Bank (2011) argues as follows:
In Bangladesh, the employment of hundreds of thousands of women in the ready-made garment industry feminized the urban public space, creating more gender-equitable norms for women's public mobility and access to public institutions. In the process, Bangladeshi women had to redefine and negotiate the terms of purdah, typically reinterpreting it as a state of mind in contrast to its customary expression as physical absence from the public space, modest clothing, and quiet demeanor.
How widespread these effects are, and how much they can be attributed to globalization, is still under debate. What is clear is that any discussion of globalization and inequality must go beyond the classical analysis and develop theory and empirical investigation on globalization and the gender dimension of inequality.
20.6.