Mainstreaming Gender in Trade Policy: Mainstreaming Gender in Trade Policy:

India’s ExperienceIndia’s Experience Rashmi BangaRashmi Banga

Senior EconomistSenior EconomistUNCTAD IndiaUNCTAD India

FTP and Impact on Sustainable FTP and Impact on Sustainable Development, Social and Gender JusticeDevelopment, Social and Gender Justice

1414thth November 2009 November 2009

Literature highlights-trade may not Literature highlights-trade may not be a gender-neutral process be a gender-neutral process

Gender inequalities which are visible often Gender inequalities which are visible often persist in terms of:persist in terms of:

Employment opportunities/job segregationEmployment opportunities/job segregation Returns from labourReturns from labour Conditions of work and quality of employmentConditions of work and quality of employment Access to basic services and resourcesAccess to basic services and resources Access to technology and trainingAccess to technology and training Distribution of income inside and outside the Distribution of income inside and outside the

householdhousehold

Gender Inequality in Access to Gender Inequality in Access to ResourcesResources

In India, like in many developing countries, In India, like in many developing countries, women are at a disadvantage in terms of women are at a disadvantage in terms of access to resources right from their births.access to resources right from their births.

Male-Female gap in Literacy rate in India is Male-Female gap in Literacy rate in India is 21.59%.21.59%.

The percentage share of female population The percentage share of female population in total population in India is around 48%, in total population in India is around 48%, while the work participation rate of while the work participation rate of females in only 26% .females in only 26% .

Women are paid on an average 40% lower than Women are paid on an average 40% lower than men for the same workmen for the same work

Empirical LiteratureEmpirical Literature USAID (2006) studied how the trade USAID (2006) studied how the trade

liberalization impacted the growth, employment liberalization impacted the growth, employment and poverty in South Africa. More specifically, by and poverty in South Africa. More specifically, by using the dynamic general equilibrium and micro using the dynamic general equilibrium and micro simulation model.-trade has increased the simulation model.-trade has increased the income inequality among men and women. income inequality among men and women.

RiddleRiddle (2004), Puri (2004) , Williams (2002), (2004), Puri (2004) , Williams (2002), Anh-Nga Tran-Nguyen (2004), Korinek’s (2005), Anh-Nga Tran-Nguyen (2004), Korinek’s (2005), Grown (2005), Coche (2004) –trade Grown (2005), Coche (2004) –trade

Very limited Empirical studies for IndiaVery limited Empirical studies for India

Impact of Exports on Gender EmploymentImpact of Exports on Gender Employment

Construct comparable trade-industry-gender data to Construct comparable trade-industry-gender data to identify sectors with higher differential in gender identify sectors with higher differential in gender participationparticipation

Assess the impact of trade on gender in different Assess the impact of trade on gender in different sectors-through Econometric Studies and Primary sectors-through Econometric Studies and Primary SurveysSurveys

Identify Gender Sensitive Products for trade Identify Gender Sensitive Products for trade negotiationsnegotiations

Gender Sensitisation of Trade Policy: Gender Sensitisation of Trade Policy: UNCTAD-India ApproachUNCTAD-India Approach

Impact of Exports on Gender Impact of Exports on Gender EmploymentEmployment

Impact of Exports on Gender Impact of Exports on Gender Employment: Employment: Methodology AdoptedMethodology Adopted

Latest available input-output matrix for India for Latest available input-output matrix for India for the years 2003-04 has been used.the years 2003-04 has been used.

Using the employment coefficients and change Using the employment coefficients and change in output due to increased exports we derive the in output due to increased exports we derive the output and employment multipliers for each output and employment multipliers for each sector over the period 2003-04 to 2006-07 sector over the period 2003-04 to 2006-07

In other words, we generate gender employment In other words, we generate gender employment by applying gender employment ratios to the by applying gender employment ratios to the increase in employment generated by the increase in employment generated by the exports across sectors.exports across sectors.

Results: Gender Employment Results: Gender Employment Generated by Increase in Exports Generated by Increase in Exports

during 2003-04 to 2006-07during 2003-04 to 2006-07 The results show that rise in exports The results show that rise in exports

during the period 2003-04 to 2006-07 during the period 2003-04 to 2006-07 generated generated 9.38 million employment 9.38 million employment for women and 16.60 million for men.for women and 16.60 million for men.

This implies thatThis implies that though exports though exports generated additional employment for generated additional employment for women in India in this period, it was only women in India in this period, it was only 36% of the total additional employment 36% of the total additional employment generated. generated.

Gender Employment Generated by Gender Employment Generated by Increase in Exports during 2003-Increase in Exports during 2003-

04 to 2006-0704 to 2006-07 However, the share of females in However, the share of females in

additional employment generated due to additional employment generated due to exports exceeds the share of females in exports exceeds the share of females in total employment by nearly 5 percent total employment by nearly 5 percent points. points.

This suggests that This suggests that exports may have led exports may have led reducing the gap between male – female reducing the gap between male – female employment in Indiaemployment in India. .

Gender Employment Generated by Gender Employment Generated by Increase in Exports during 2003-Increase in Exports during 2003-

04 to 2006-0704 to 2006-07 It is interesting to note that the female It is interesting to note that the female

generated employment is found to be generated employment is found to be high high in agriculture sectorin agriculture sector, mainly in food , mainly in food crops, plantation crops and cash crops;crops, plantation crops and cash crops;

In manufacturing sectorIn manufacturing sector the female the female employment generated is found to be employment generated is found to be high in cotton textiles, textile products, high in cotton textiles, textile products, wood furniture and miscellaneous wood furniture and miscellaneous manufacturing products. manufacturing products.

Among services sectorsAmong services sectors female female employment generated is found to be employment generated is found to be high in domestic trade, hotels and high in domestic trade, hotels and restaurants, other transport services and restaurants, other transport services and tourism. tourism.

Impact of Trade on Gender Impact of Trade on Gender Employment: Econometric StudyEmployment: Econometric Study

Methodology Adopted: Impact of Trade on Methodology Adopted: Impact of Trade on Gender EmploymentGender Employment

Econometric analysis to estimate impact of Econometric analysis to estimate impact of exports/imports on gender employment in 54 exports/imports on gender employment in 54 industries over the 1999-00 and 2004-05industries over the 1999-00 and 2004-05

Taking account of Taking account of rigidities in the Indian labour rigidities in the Indian labour market market we estimate we estimate dynamic panel datadynamic panel data (DPD) model using (DPD) model using Generalised Method of Generalised Method of Moments (GMM)Moments (GMM) following Arellano and Bond following Arellano and Bond (1991). (1991).

Labour Demand EquationLabour Demand Equation We We assume two inputs CES production function, assume two inputs CES production function,

which allows for non-constant returns to scale which allows for non-constant returns to scale provided the function remains homogenous of degree provided the function remains homogenous of degree µ.µ.

Q = Q = [ s(k) [ s(k)-- + (1-s) (Le+ (1-s) (Lett))- - ]] - -// …(a)…(a) Where Where > 0 & 0 > 0 & 0 s< 1 s< 1 Q is the output, k is the capital, s Q is the output, k is the capital, s is the share is the share

parameter and parameter and determines the degree of determines the degree of substitutability of the inputs.substitutability of the inputs.

[[/(1+/(1+)] represents the elasiticity of substitution and )] represents the elasiticity of substitution and t represents exogenous change, e.g., through trade t represents exogenous change, e.g., through trade or technology.or technology.

Results: Impact of Trade on Results: Impact of Trade on Gender Employment in IndiaGender Employment in India

Export intensityExport intensity has a positive and has a positive and significant impact on women significant impact on women employment. employment.

IImportsmports have not led to any have not led to any displacement of women employment.displacement of women employment.

Further, we find that when real Further, we find that when real wage rate rises, the fall in women wage rate rises, the fall in women employment is higher than men. employment is higher than men.

Primary SurveysPrimary Surveys

UNCTAD’s India Project: Primary UNCTAD’s India Project: Primary SurveysSurveys

Primary survey in 10 sub-sectors to Primary survey in 10 sub-sectors to assess the impact of trade on genderassess the impact of trade on gender

• Plantation sector - Tea, Coffee and Rubber, Plantation sector - Tea, Coffee and Rubber, • Food Processing - Cashew processing, Food Processing - Cashew processing,

Horticulture, Dairying, and Chilli processing, Horticulture, Dairying, and Chilli processing, • Textiles and clothing (including Handlooms), Textiles and clothing (including Handlooms), • Handicrafts, and Handicrafts, and • Fisheries & other marine productsFisheries & other marine products..

Study on impact of trade on gender in Study on impact of trade on gender in services sector.services sector.

Primary Surveys indicate that:Primary Surveys indicate that: There is a definite increase in demand for There is a definite increase in demand for

casual workers to cope with export-related casual workers to cope with export-related trade growth, which led to a trade growth, which led to a rise in the informal rise in the informal sector workers, a high percentage of them sector workers, a high percentage of them being women. being women.

Casual labour while providing employment can Casual labour while providing employment can be easily hired or laid off depending on be easily hired or laid off depending on demand fluctuations. Thus employment is demand fluctuations. Thus employment is precarious. Women are also subjected to precarious. Women are also subjected to poor poor wages and conditions of work.wages and conditions of work.

Gender implications – Trade in ServicesGender implications – Trade in Services

Services trade has provided new opportunities Services trade has provided new opportunities for women.for women.

Flexi-timing; part time; work from home optionsFlexi-timing; part time; work from home options However, it is interesting to note that even for However, it is interesting to note that even for

graduate and above, the salaries earned by graduate and above, the salaries earned by females on an average is only 70-75% of that females on an average is only 70-75% of that earned by males with similar education level. earned by males with similar education level.

This implies that with higher growth of services, This implies that with higher growth of services, even if employment opportunities for women even if employment opportunities for women grow at the same rate, the benefits of the growth grow at the same rate, the benefits of the growth goes more to males as compared as femalesgoes more to males as compared as females

Gender Implications of Trade in Gender Implications of Trade in IndiaIndia

International trade in India therefore has International trade in India therefore has significant gender implications.significant gender implications.

On one hand it is providing new job On one hand it is providing new job opportunities to womenopportunities to women

On the other hand, these jobs are On the other hand, these jobs are provided at lower wages and women are provided at lower wages and women are more vulnerable in terms of lay-offsmore vulnerable in terms of lay-offs

Slowdown may therefore have more Slowdown may therefore have more severe impact on women employmentsevere impact on women employment

Identification of Gender Sensitive Identification of Gender Sensitive products in Bilateral FTAsproducts in Bilateral FTAs

Gender Sensitive ProductsGender Sensitive Products

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

Identifying Gender Sensitive Identifying Gender Sensitive ProductsProducts

In order to identify gender sensitive products, In order to identify gender sensitive products, three steps are undertakenthree steps are undertaken. .

Match trade data with industry data using Match trade data with industry data using concordance matrix: NIC to HS 2002concordance matrix: NIC to HS 2002

Identify industries with high women Identify industries with high women employment (>35%)employment (>35%)

Select the products matched to the Select the products matched to the industries with higher women employment.industries with higher women employment.

Industries with women Industries with women employment greater than employment greater than

manufacturing average (13%)manufacturing average (13%)NICNICCodesCodes

DescriptionDescription Ratio of Women Ratio of Women Employment Employment to Total to Total Employment Employment (%)(%)

160160 Manufacture of the Manufacture of the tobacco productstobacco products

0.640.64

181181 Manufacture of wearing Manufacture of wearing apparel, except fur apparel, except fur apparel.apparel.

0.590.59

154154 Manufacture of other food Manufacture of other food products products

0.390.39

014014 Agricultural and animal Agricultural and animal husbandry service husbandry service activities, except activities, except veterinary veterinary

0.390.39

Using NIC and HS concordance- products Using NIC and HS concordance- products produced by these sectors which are highly produced by these sectors which are highly traded have been identified at 6-digit level.traded have been identified at 6-digit level.

A list of Gender Sensitive ProductsA list of Gender Sensitive Products has been has been arrived at 6-digit HS codes.arrived at 6-digit HS codes.

This list can be used for stakeholder This list can be used for stakeholder consultations with women groups during consultations with women groups during FTA negotiations. FTA negotiations.

Identifying export interest and seeking Identifying export interest and seeking deeper tariff cuts by partner country in these deeper tariff cuts by partner country in these productsproducts

Gender Sensitization of Trade Gender Sensitization of Trade PoliciesPolicies

Identification of sectors with higher women Identification of sectors with higher women employment can help in formulating employment can help in formulating gender targeted trade policies.gender targeted trade policies.

Exports of identified sectors can be Exports of identified sectors can be promoted with gender specific schemes.promoted with gender specific schemes.

Women entrepreneurs can be encouraged Women entrepreneurs can be encouraged in identified sectors.in identified sectors.

Gender sensitive products could be Gender sensitive products could be incorporated in multilateral/bilateral trade incorporated in multilateral/bilateral trade negotiations.negotiations.

UNCTAD’s India project is in the process of UNCTAD’s India project is in the process of preparing a list of gender sensitive products preparing a list of gender sensitive products for India’s FTA negotiations, with the for India’s FTA negotiations, with the objective of:objective of:

Conducting Stakeholder consultations with Conducting Stakeholder consultations with women groups on these productswomen groups on these products

Identifying export interest and seeking Identifying export interest and seeking deeper tariff cuts by partner country in these deeper tariff cuts by partner country in these productsproducts

Gender assessments could be included in Gender assessments could be included in trade policy review mechanisms for countries.trade policy review mechanisms for countries.

Implications of multilateral and regional trade Implications of multilateral and regional trade negotiations on gender needs to be assessed negotiations on gender needs to be assessed along with their economic implications. along with their economic implications.

Gender sensitive products need to be Gender sensitive products need to be identified and women groups need to be identified and women groups need to be sensitised by including them in stakeholder sensitised by including them in stakeholder consultations on multilateral/regional FTAs.consultations on multilateral/regional FTAs.

Further, higher access to labour markets via Further, higher access to labour markets via Mode 4, especially for women, can be carved Mode 4, especially for women, can be carved into bilateral negotiations.into bilateral negotiations.

Reliable predictions of how trade agreements Reliable predictions of how trade agreements will impact on men and women.will impact on men and women.

Future Research AreasFuture Research Areas

More studies and research is required More studies and research is required

Casualisation of women labour may increase Casualisation of women labour may increase vulnerabilities of the women- research neededvulnerabilities of the women- research needed

Trade-growth-Gender nexus needs in-depth Trade-growth-Gender nexus needs in-depth researchresearch

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