Overcoming Gender Segmentation of GCC Labor Markets Steffen Hertog London School of Economics (with apologies to Diane Zovighian)

GCC labour markets are primarily segmented between expatriate and local as well as – closely related – public and private The main secondary cleavage however is between male and female

Public vs. private and male vs. female: Saudi employees in 2007

Three dimensions of segmentation

Factors of segmentation include – Wage expectations of employers and employees Levels of available unearned income – Formal and informal labour rights – Levels and types of education – Intra-family division of labour and cultural norms more broadly Of women themselves or of their families? – Infrastructural obstacles

A paradox Some of the factors of segmentation would seem to explain lower female labour market participation, Others however should increase participation relative to males, notably – Lower reservation wages – Higher education levels The factors working against labour market participation hence have to be particularly pronounced

Saudi male vs. female private sector wages

Situation similar in other GCC countries (data from Zovighian 2010) – Women account for 84% and 75% of the unemployed in Kuwait (MOP 2008) and Bahrain (MOL 2009) respectively – In Bahrain’s private sector, women’s average wages are a third lower than men’s (417 BD compared to 609 BD). – In Kuwait, the average wage for women is 42% lower than the average wage for men (489 KD compared to 844 KD). – In Kuwait, though women account for 45% of the national labour force, they represent only 19% of nationals in managerial positions.

Participation is increasing, but remains low by international standards Source: Diane Zovighian, based on national sources

The outlook for female labour market integration Huge waste of current educational investment – 25% of the Saudi national budget e.g. – Rising, as enrolment rates continue to increase – Wasted also through early retirement? Unemployment support schemes under way in Saudi Arabia and Oman (UAE?) could add huge fiscal cost through large potential pool of female claimants – Formal participation ratios could rise dramatically but spuriously Welfare and labour law arrangements are still largely inspired by patriarchal model – Greater male entitlements to government benefits as heads of household, creating disincentives for female labour – Pricing women out of the market through generous private benefits? – An opportunity to shift towards equality in the course of general labour market integration? Could a parallel infrastructure for women in the workplace increase female labour market participation in conservative societies? – Even if it does, it would further “lock in” gender segregation?

Nationalizing the private sector and increasing female labour force participation are often still separate targets

Economic integration or increase in patronage?

And if we really nationalize private employment, do we pauperize the female labour force? In Kuwait, the proportion of highly educated female workers in the private sector decreased from 52 to 16% of female workers from 2002 to 2009 This has accompanied by a decrease in average wages from an estimated 730 KD in 2002 to an estimated 489 KD in 2008 Nationalization pressures also lead to the “ghost workers” phenomenon, which increases unearned income

Building human capital – or parking it?

And is it the right human capital?

More evidence of sectoral segmentation