Mainstreaming Gender in Trade Policy: India’s Experience

1. Mainstreaming Gender in Trade Policy: India’s Experience Rashmi Banga Senior Economist UNCTAD India FTP and Impact on Sustainable Development, Social and Gender Justice 14th November 2009

2. Literature highlights-trade may not be a gender-neutral process • Gender inequalities which are visible often persist in terms of: • Employment opportunities/job segregation • Returns from labour • Conditions of work and quality of employment • Access to basic services and resources • Access to technology and training • Distribution of income inside and outside the household

3. Gender Inequality in Access to Resources • In India, like in many developing countries, women are at a disadvantage in terms of access to resources right from their births. • Male-Female gap in Literacy rate in India is 21.59%. • The percentage share of female population in total population in India is around 48%, while the work participation rate of females in only 26% . • Women are paid on an average 40% lower than men for the same work

4. Empirical Literature • USAID (2006) studied how the trade liberalization impacted the growth, employment and poverty in South Africa. More specifically, by using the dynamic general equilibrium and micro simulation model.-trade has increased the income inequality among men and women. • Riddle(2004), Puri (2004) , Williams (2002), Anh-Nga Tran-Nguyen (2004), Korinek’s (2005), Grown (2005), Coche (2004) –trade • Very limited Empirical studies for India

5. Gender Sensitisation of Trade Policy: UNCTAD-India Approach • Impact of Exports on Gender Employment • Construct comparable trade-industry-gender data to identify sectors with higher differential in gender participation • Assess the impact of trade on gender in different sectors-through Econometric Studies and Primary Surveys • Identify Gender Sensitive Products for trade negotiations

6. Impact of Exports on Gender Employment

7. Impact of Exports on Gender Employment: Methodology Adopted • Latest available input-output matrix for India for the years 2003-04 has been used. • Using the employment coefficients and change in output due to increased exports we derive the output and employment multipliers for each sector over the period 2003-04 to 2006-07 • In other words, we generate gender employment by applying gender employment ratios to the increase in employment generated by the exports across sectors.

8. Results: Gender Employment Generated by Increase in Exports during 2003-04 to 2006-07 • The results show that rise in exports during the period 2003-04 to 2006-07 generated 9.38 million employment for women and 16.60 million for men. • This implies thatthough exports generated additional employment for women in India in this period, it was only 36% of the total additional employment generated.

9. Gender Employment Generated by Increase in Exports during 2003-04 to 2006-07 • However, the share of females in additional employment generated due to exports exceeds the share of females in total employment by nearly 5 percent points. • This suggests that exports may have led reducing the gap between male – female employment in India.

10. Gender Employment Generated by Increase in Exports during 2003-04 to 2006-07 • It is interesting to note that the female generated employment is found to be high in agriculture sector, mainly in food crops, plantation crops and cash crops; • In manufacturing sector the female employment generated is found to be high in cotton textiles, textile products, wood furniture and miscellaneous manufacturing products. • Among services sectors female employment generated is found to be high in domestic trade, hotels and restaurants, other transport services and tourism.

11. Impact of Trade on Gender Employment: Econometric Study

12. Methodology Adopted: Impact of Trade on Gender Employment • Econometric analysis to estimate impact of exports/imports on gender employment in 54 industries over the 1999-00 and 2004-05 • Taking account of rigidities in the Indian labour market we estimate dynamic panel data (DPD) model using Generalised Method of Moments (GMM) following Arellano and Bond (1991).

13. Labour Demand Equation • We assume two inputs CES production function, which allows for non-constant returns to scale provided the function remains homogenous of degree µ. • Q =  [ s(k)-+ (1-s) (Let)- ] -/…(a) • Where  > 0 & 0 s< 1 • Q is the output, k is the capital, s is the share parameter and determines the degree of substitutability of the inputs. • [/(1+)] represents the elasiticity of substitution and t represents exogenous change, e.g., through trade or technology.

14. Results: Impact of Trade on Gender Employment in India • Export intensity has a positive and significant impact on women employment. • Imports have not led to any displacement of women employment. • Further, we find that when real wage rate rises, the fall in women employment is higher than men.

15. Primary Surveys

16. UNCTAD’s India Project: Primary Surveys • Primary survey in 10 sub-sectors to assess the impact of trade on gender • Plantation sector - Tea, Coffee and Rubber, • Food Processing - Cashew processing, Horticulture, Dairying, and Chilli processing, • Textiles and clothing (including Handlooms), • Handicrafts, and • Fisheries & other marine products. • Study on impact of trade on gender in services sector.

17. Primary Surveys indicate that: • There is a definite increase in demand for casual workers to cope with export-related trade growth, which led to a rise in the informal sector workers, a high percentage of them being women. • Casual labour while providing employment can be easily hired or laid off depending on demand fluctuations. Thus employment is precarious. Women are also subjected to poor wages and conditions of work.

18. Gender implications – Trade in Services • Services trade has provided new opportunities for women. • Flexi-timing; part time; work from home options • However, it is interesting to note that even for graduate and above, the salaries earned by females on an average is only 70-75% of that earned by males with similar education level. • This implies that with higher growth of services, even if employment opportunities for women grow at the same rate, the benefits of the growth goes more to males as compared as females

19. Gender Implications of Trade in India • International trade in India therefore has significant gender implications. • On one hand it is providing new job opportunities to women • On the other hand, these jobs are provided at lower wages and women are more vulnerable in terms of lay-offs • Slowdown may therefore have more severe impact on women employment

20. Identification of Gender Sensitive products in Bilateral FTAs

21. Gender Sensitive Products • We define Gender sensitive products as products that are produced by the industries where female employment is three times higher than the average for the entire manufacturing sector.

22. Identifying Gender Sensitive Products • In order to identify gender sensitive products, three steps are undertaken. • Match trade data with industry data using concordance matrix: NIC to HS 2002 • Identify industries with high women employment (>35%) • Select the products matched to the industries with higher women employment.

23. Industries with women employment greater than manufacturing average (13%)

24. Using NIC and HS concordance- products produced by these sectors which are highly traded have been identified at 6-digit level. • A list of Gender Sensitive Products has been arrived at 6-digit HS codes. • This list can be used for stakeholder consultations with women groups during FTA negotiations. • Identifying export interest and seeking deeper tariff cuts by partner country in these products

25. Gender Sensitization of Trade Policies

26. Identification of sectors with higher women employment can help in formulating gender targeted trade policies. • Exports of identified sectors can be promoted with gender specific schemes. • Women entrepreneurs can be encouraged in identified sectors.

27. Gender sensitive products could be incorporated in multilateral/bilateral trade negotiations. • UNCTAD’s India project is in the process of preparing a list of gender sensitive products for India’s FTA negotiations, with the objective of: • Conducting Stakeholder consultations with women groups on these products • Identifying export interest and seeking deeper tariff cuts by partner country in these products

28. Gender assessments could be included in trade policy review mechanisms for countries. • Implications of multilateral and regional trade negotiations on gender needs to be assessed along with their economic implications. • Gender sensitive products need to be identified and women groups need to be sensitised by including them in stakeholder consultations on multilateral/regional FTAs.

29. Further, higher access to labour markets via Mode 4, especially for women, can be carved into bilateral negotiations. • Reliable predictions of how trade agreements will impact on men and women.

30. Future Research Areas • More studies and research is required • Casualisation of women labour may increase vulnerabilities of the women- research needed • Trade-growth-Gender nexus needs in-depth research

31. Thank You