Gender and Trade - Does trade promote gender-wage equity ? - Does trade promote gender-wage equity ?

Author	Message
Sona Mitra Sep 27 2007 6:55PM	Gary Becker’s theory on Economics of Discrimination (1957) lead one to expect that increased competition from international trade reduces the incentive for employers to discriminate against women. Such effect should be more pronounced in concentrated sectors of the economy, where employers can use excess profits to cover the costs of discrimination. Alternatively, wage discrimination may increase with growing trade in a context of employment segregation that limits women’s ability to achieve wage gains. However, the empirical observations from the Latin American and South-East and South Asian experiences have not been consistent with Becker’s theory. On the contrary, the experiences have shown that greater international competition in concentrated sectors, like the export-oriented industries in the manufacturing sector, is associated with larger wage gaps between men and women. Women workers have been situated at the bottom end of the value chain and have been employed at lower wage rates than their male counterparts in the export industries, which had initially faced an increase in the absorption of women workers as a result of trade liberalization in many developing countries. There have been various factors that have been cited as reasons for women facing wage discrimination at the workplaces. For this topic, the discussion forum would like to delve into the reasons for such gender-wage inequalities as well as discuss the experiences of developing nations in this respect. We encourage all to participate in this round and freely post their opinions in the forum to generate a lively discussion on this important issue.

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Sona Mitra
Sep 27 2007 6:55PM

Gary Becker’s theory on Economics of Discrimination (1957) lead one to expect that increased competition from international trade reduces the incentive for employers to discriminate against women. Such effect should be more pronounced in concentrated sectors of the economy, where employers can use excess profits to cover the costs of discrimination.

Alternatively, wage discrimination may increase with growing trade in a context of employment segregation that limits women’s ability to achieve wage gains.

However, the empirical observations from the Latin American and South-East and South Asian experiences have not been consistent with Becker’s theory. On the contrary, the experiences have shown that greater international competition in concentrated sectors, like the export-oriented industries in the manufacturing sector, is associated with larger wage gaps between men and women.

Women workers have been situated at the bottom end of the value chain and have been employed at lower wage rates than their male counterparts in the export industries, which had initially faced an increase in the absorption of women workers as a result of trade liberalization in many developing countries. There have been various factors that have been cited as reasons for women facing wage discrimination at the workplaces.

For this topic, the discussion forum would like to delve into the reasons for such gender-wage inequalities as well as discuss the experiences of developing nations in this respect.

We encourage all to participate in this round and freely post their opinions in the forum to generate a lively discussion on this important issue.