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Gender and Economic Isolation in an Era of Globalization

Gender and Economic Isolation in an Era of Globalization. Jennifer Olmsted Dept. of Economics Drew University jolmsted@drew.edu. Globalization. Causes Technological innovation Transport/manufacturing/telecommunication Role of policies Structural adjustment

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Gender and Economic Isolation in an Era of Globalization

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  1. Gender and Economic Isolation in an Era of Globalization Jennifer Olmsted Dept. of EconomicsDrew University jolmsted@drew.edu

  2. Globalization • Causes • Technological innovation • Transport/manufacturing/telecommunication • Role of policies • Structural adjustment • Increased mobility of capital and goods (labor to a lesser extent) • Benefits • Economic growth • Expanded choice/variety • Risks • Increased volatility • Small countries more vulnerable to threat of economic isolation • Implications of that increased risk by gender/class

  3. Externally imposed restrictions • Multi-lateral sanctions • Eg: Iraq/Sudan • Unilateral • Eg: Cuba/Iran • Other examples • Eg: Palestine – pre and post 2007

  4. Gender and Globalization Literature • Reduction in trade barriers linked to rising female employment • Rise of male unemployment? • Women’s wages lower? • Types of industries that are expanding are female dominated? • Debate over whether globalization beneficial to women • Female employment = female empowerment • Work conditions • Double burden • Mehra and Gammage (1999) and Beneria (2003) • Assumption of universal trend! • What can an examination of sanctioned countries tell us about how gender and globalization interact?

  5. Externally Imposed Economic Isolation • Effectiveness of sanctions in reaching policy objectives: • Hufbauer, Schott and Elliot (1990) • Measuring impact on macroeconomic indicators: • National income • Iran:Torbat (2005) annual reduction of 1.1% to GDP • Iraq/Palestine: Olmsted (2006) • 50/40 % decline in per capita income in two year period respectively • USA: Gravity model Hufbauer and Oegg (2003) • Labor outcomes • Palestine: Ruppert-Bulmer (2003) • Humanitarian issues: - eg poverty rates/health outcomes • Iraq: Garfield (1999), Niblock (2001) • Palestine: World Bank (2003)

  6. Gender and Sanctions • Focus primarily on health/well-being outcomes • Maternal and infant mortality • Education outcomes • Olmsted (2006) compares Palestine and Iraq – finds minimal gender differences • Minimal research on gendering of employment effects • Assumption that economic hardship will cause women’s labor force participation to rise (added worker effect) • Amnesty International (2004) • Assumption that lack of increase in employment can be explained by gender norms not macroeconomic conditions • ILO (2004)

  7. Effect of Sanctions on Female Employment • Changes to Economy • Trade volume declines • Female employment may decline, depending on types of jobs they previously held • National income declines • Theory unclear on effect on female labor force participation • ‘added worker effect’ – household income declines/women’s labor force participation rises • ‘crowding out effect’ – women pushed out of labor market • Changes in government policy • Difficulties maintaining programs • Attempts to reduce negative employment impact

  8. Summary of findings • Women’s Labor force participation rate (LFP) negatively impacted • very little evidence of added worker effect • some evidence of crowding • Evidence that women’s employment tied to trade openness • Return to subsistence agriculture may mask actual decline in LFP • Less skilled/poorer women most likely to lose jobs since they are in traded sectors • Some industries may become defeminized as a result of economic hardship • Government employment tends to benefit educated women, not those losing jobs in traded sector • Government inability to sustain programs may affect female employment • Trends may vary depending on structure of local economy • Studying Iran of particular interest since female LFP rising despite sanctions

  9. Women’s Labor Force Participation (LFP) in MENA • Trends • LFP lagged other parts of the world, despite rising literacy rates • Very low rates of women’s employment in manufacturing • Exceptions: Morocco, Algeria, Iran and Palestine • Female LFP rates rising more rapidly in MOST countries in recent years. • Closer look at Iran, Iraq, Palestine, Sudan and (Turkey) warranted • Proposed explanations: • Measurement problems • Gender norms/Islam/Fertility • Tzannatos (1999) finds that Muslim and Catholic countries both have lower female LFP rates • Economic structure • Moghadam (1995) argues that Import Substitution policies kept female LFP rates low. Cites North Africa as exception

  10. Data Sources • ILO – KILM • ILO – Laborsta • Palestine – PCBS Labor force survey • Iran – Statistical Center Census data

  11. Iraq • Micro level labor force data unavailable • LFP rate stagnated in 1980s and 1990s • anthropological studies • Cainkar (1993) and Al Ali (1995) • Educated women exited labor market due to declining wages/benefits • Less educated women may have been driven into market due to economic hardship

  12. Palestine: 1995 – 2003 • Female Labor Force Participation appears flat • A closer examination of the data suggests: • Decline in women’s access to wage employment • Unpaid ag rises from 27 to 50% of all female employment • Less educated women’s employment declining • Decline in textiles/apparel sector from 14 to 8 % of all female employment • Particularly stark in Gaza – from 17 to 2 % • Educated women’s employment has risen • Government sector growing from 17 to 23% • Defeminization of the health care sector • From 10 to 5% of all female employment • From 50% to 14% of all health care workers

  13. Palestine: 1995 – 2003 • Female Labor Force Participation appears flat • A closer examination of the data suggests: • Decline in women’s access to wage employment • Unpaid ag rises from 27 to 50% of all female employment • Less educated women’s employment declining • Decline in textiles/apparel sector from 14 to 8 % of all female employment • Particularly stark in Gaza – from 17 to 2 % • Educated women’s employment has risen • Government sector growing from 17 to 23% • Defeminization of the health care sector • From 10 to 5% of all female employment • From 50% to 14% of all health care workers

  14. Role of Internal vs. Global Factors? • Role of Gender norms • Interviews with working class women suggest that society becoming more accepting of women working • Evidence from health sector suggests defeminization • Role of Internal policy • PA job creation • Biased in favor of educated, particularly in case of women • Role of External policies • Israel: • closure policies made investment in WB/GS less appealing • US: • Jordan and Egypt duty free imports w/Israeli joint ventures as reward for participation in peace process • Jordan’s exports to US rise from $2 million to $567 million btw 1999 and 2003

  15. Iran 1976-2006 • Female Labor Force Participation dropped after revolution and then rose. • A closer examination of the data suggests: • Iranian manufacturing sector important, but declining employer of women • Carpet weaving experienced decline and then rise in employment btw 1976 and 2006 • Low and declining rates of public sector employment • Educated women benefit most from public sector • High rate of informal sector employment

  16. Iran • Female Labor Force Participation dropped after revolution and then rose. • A closer examination of the data suggests: • Iranian manufacturing sector important, but declining employer of women (33 to 23%) • Carpet weaving experienced decline and then rise in employment btw 1976 and 2006 • Low and declining rates of public sector employment • Educated women benefit most from public sector • High rate of informal sector employment

  17. Role of Internal vs. Global Factors? • Role of Internal Policies: • Focus of existing literature on ideological shift after Islamic Revolution • F. Moghadam 1994, Alizadeh 2003, V. Moghadam 2003, Nomani and Behdad 2006 • Role of Global Factors? • Sanctions • Beginning in 1979 US imposed sanctions on Iran • Migration Patterns • Post-revolution brain drain • Afghan war led to Iran becoming host to large number of refugees

  18. Sanctions: • Although overall impact on national income small, manufacturing sector particularly affected by sanctions • 50% of female employment was in manufacturing pre-revolution • Carpet industry employed large numbers of young, uneducated Iranian women • Data suggest the number of women in this industry declined from 606,646 to 337,436 between 1976 and 1986 (Karimi forthcoming) • 30% decline in female carpet industry jobs (conservative estimate) could lead to 2 percentage point drop in female LFP (eg from 12.9 to 10.9)

  19. Migration: • Iran suffered large high brain drain • Carrington and Detragiache (1998) • 20% exodus of educated women could explain further 0.4% drop, due to educated women’s relatively high LFP rates. • Influx of Afghan refugees • Not clear how/whether Afghan refugees incorporated into census • Karimi (forthcoming) argues they drove down wages in low skill markets

  20. Conclusions • Experience of “Globalization” not universal • Iraq, Iran and Palestine three communities with reduced access to international markets in recent years • Critics of globalization ignore far worse fate – economic isolation • Sanctions literature has focused mainly on consumption and economic well-being, but labor implications also important to consider

  21. Conclusions continuedExplaining female employment • Trade restrictions may have gender/class implications • Less educated women (and men) often more dependent on traded sector • Minimal evidence of added worker effect • Some evidence of crowding out • Emphasis on ideological/gender norm supply side explanation of female labor force participation may ignore macroeconomic conditions • Need for considerable more research

  22. Further research: • Single country time series analysis of female labor force participation, to link employment and macro trends • Further analysis of Iran particularly interesting – rising employment despite shrinking government sector and sanctions • Microeconomic analysis of wages • Hypothesis: • Shift in size of education/sex wage gap: • preliminary analysis of Palestinian data suggests this may not be the case (wage rigidities?) • Analysis of income distribution • Hypothesis: • Household income inequality worsening due to: • Rising number of educated two earner families • Decline in access of less skilled women to wage labor

  23. Further research continued: • More rigorous cross-country econometric study • Challenges: • Consistent measure of female labor force participation • Consistent measure of economic openness • Need to distinguish self-imposed isolation from externally imposed • Regional study of the post peace process economies of Jordan/Egypt/Palestine/Israel • Theoretical exploration of relationship between gender norms and economic conditions • Gender norms can shape economic outcomes • Economic outcomes can (re)shape gender norms

  24. Questions? • Contact information: • jolmsted@drew.edu

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