Gender and Economic Isolation in an Era of Globalization Jennifer Olmsted Dept. of Economics Drew University

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

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

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?

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)

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)

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

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

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

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

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

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

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

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

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 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

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

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

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)

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

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

Conclusions continued Explaining 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

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

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 Further research continued:

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