Trade and Education Divergence: A gender Perspective Ramya Vijaya Richard Stockton College

Gender Trends in Education Gender Gaps in Education Declining Gender Gaps in Education Declining However levels of school enrollment remain low However levels of school enrollment remain low Average secondary enrollment: Low and Middle Income: 2004 Average secondary enrollment: Low and Middle Income: 2004 Male: 66% Female 64%

Education and Economic Opportunities Do economic opportunities exist that reward investment in education? Do economic opportunities exist that reward investment in education? H-O trade theory provides a context for examining links between economic opportunity and education H-O trade theory provides a context for examining links between economic opportunity and education

Trade and Education H-O theory: Trade Increases Demand for countries abundant resource H-O theory: Trade Increases Demand for countries abundant resource Countries specializing in labor- intensive production likely to see declines in incentives to invest in education due to expansion in low- skilled employment Countries specializing in labor- intensive production likely to see declines in incentives to invest in education due to expansion in low- skilled employment

Countries specializing in high-skilled production likely to see increased returns to education and higher incentive to invest in education Countries specializing in high-skilled production likely to see increased returns to education and higher incentive to invest in education Theory therefore predicts a divergence in incentives between countries Theory therefore predicts a divergence in incentives between countries Empirical Evidence: Wood and Ridao-Cano (1997) Empirical Evidence: Wood and Ridao-Cano (1997)

Trade, Incentives and Gender Feminization of labor: Expansion in low-skilled export production relied heavily on female labor Feminization of labor: Expansion in low-skilled export production relied heavily on female labor Defeminization as exports become more capital-intensive: Also lowers female incentives to upgrade skills? Defeminization as exports become more capital-intensive: Also lowers female incentives to upgrade skills? Therefore changes in education incentives more likely for women Therefore changes in education incentives more likely for women

Additional Factors Darity (1995): Export boom could cause nutritional deprivation due to less time for household production Darity (1995): Export boom could cause nutritional deprivation due to less time for household production A combination of low-skilled employment expansion and time burden: limited incentive and time for education investments for women? A combination of low-skilled employment expansion and time burden: limited incentive and time for education investments for women?

Income Effect of Trade Can increases in income due to trade compensate for the negative incentive effect Can increases in income due to trade compensate for the negative incentive effect Is the income effect gender neutral? Is the income effect gender neutral? Increases in income fund boys education Greenhalgh (1985) Increases in income fund boys education Greenhalgh (1985) Girls more likely to take over household production Girls more likely to take over household production

Empirical Analysis Does trade impact education as predicted by H-O? Does trade impact education as predicted by H-O? Does this impact have a gender dimension? Does this impact have a gender dimension? Cross-country panel data analysis using gender differentiated education data: Cross-country panel data analysis using gender differentiated education data:

Data Description Dependent variable: Rate of Change in male and female secondary education Dependent variable: Rate of Change in male and female secondary education Secondary enrollment more relevant for job skills than primary enrollment Tertiary data sparse and less comparable across countries due to specializations

Independent variable: (all variables in rates of change) Independent variable: (all variables in rates of change) Trade as a percentage of GDP 5-year lagged values used as an instrument due to causality issues 5-year lagged values used as an instrument due to causality issues Other control variables: Other control variables: Per Capita GDP, Secondary School Teachers

Country Groups Divergence hypothesis suggests gains in education in developed economies and corresponding declines in developing economies Divergence hypothesis suggests gains in education in developed economies and corresponding declines in developing economies In order to focus on the developing economies, we group together low and middle income countries. In order to focus on the developing economies, we group together low and middle income countries.

Within the low and middle income group, sub-groups of manufacturing exporters and food exporters are created Within the low and middle income group, sub-groups of manufacturing exporters and food exporters are created Manufacturing exporters likely to feel the strongest impact of the H-O divergence hypothesis and have been the focus of the feminization of export labor literature. Manufacturing exporters likely to feel the strongest impact of the H-O divergence hypothesis and have been the focus of the feminization of export labor literature.

Instrumental Variable Regression- Middle and Low Income Non-Oil Countries (standard errors in parentheses) Instrumental Variable Regression- Middle and Low Income Non-Oil Countries (standard errors in parentheses) VariableFemale EnrollMale Enroll Trade-0.027* (0.012)(0.020) (0.012)(0.020) Percapita * (0.051)(0.053) (0.051)(0.053) Teachers0.215***0.224*** (0.028)(0.030) (0.028)(0.030) N R-squared Notes: *** Statistically significant at 99%; ** statistically significant at 95%; *statistically significant at 90%.

Low and Middle Income Food Exporting Countries (standard errors in parentheses) VariableFemale EnrollMale Enroll Trade-0.043*0.010 (0.027)(0.035) (0.027)(0.035) Percapita (0.077)(0.102) Teachers 0.206***0.272*** (0.046)(0.062) N R-squared Notes: *** Statistically significant at 99%; ** statistically significant at 95%; *statistically significant at 90%.

Low and Middle Income Manufacturing Exporting Countries (standard errors in parentheses) VariableFemale EnrollMale Enroll Trade-0.084**-0.088** (0.043)(0.044) (0.043)(0.044) Percapita (0.02)(0.095) Teachers 0.41***0.364*** (0.055)(0.057) N R-squared Notes: *** Statistically significant at 99%; ** statistically significant at 95%; *statistically significant at 90%.

Summary of Results Trade has a negative impact on female enrollment for all the groups Trade has a negative impact on female enrollment for all the groups For the low and middle income countries as a group no significant impact on male enrollments For the low and middle income countries as a group no significant impact on male enrollments This supports the hypothesis of gender pattern in education divergence This supports the hypothesis of gender pattern in education divergence

For manufacturing exporters trade has a negative impact on both male and female enrollments For manufacturing exporters trade has a negative impact on both male and female enrollments This supports the H-O theory of divergence between countries This supports the H-O theory of divergence between countries Suggests downward convergence in gender gap Suggests downward convergence in gender gap