Bridging The Gap: Trade Liberalisation and The Gender Wage Divide in Latin America

Abstract

Hecksher-Ohlin model posits that trade liberalisation serves to diminish the gender wage divide in developing economies with an abundance of lower-skilled labour, as these economies tend to specialise in low-skilled, labour-intensive exports. Since women are frequently employed in lower-skilled roles, this shift increases demand for their labour, raising wages in these sectors. The objective of the paper is to conduct an analysis of the impacts of trade liberalisation on the gender wage gap in twelve Latin American countries between 1995 and 2014. Static and dynamic panel data models are applied to investigate the effects on Latin American countries. The findings from both approaches indicate that trade liberalisation has, in fact, widened the gender wage gap in Latin American countries. This paper, therefore, underscores the necessity of exploring alternative theoretical approaches to better comprehend the complex dynamics between trade and gender inequalities.

Keywords

• Trade Liberalisation
• Gender Wage Gap
• Latin America
• Panel ARDL Model

Latin Amerika'da Ticari Liberizasyon ve Cinsiyetler Arası Ücret Farkı

Abstract

Heckscher-Ohlin modeli, düşük vasıflı işgücüne sahip gelişmekte olan ekonomilerde ticaretin serbestleştirilmesinin toplumsal cinsiyet kaynaklı ücret farkını azaltacağını öne sürmektedir; çünkü bu ekonomiler, düşük vasıf gerektiren emek-yoğun ihracatlarda uzmanlaşma eğilimindedir. Kadınların genellikle düşük vasıflı işlerde istihdam edilmesi nedeniyle, bu değişimin kadın işgücüne olan talebi artırması ve bu sektörlerdeki ücretlerin yükselmesi beklenir. Bu çalışmanın amacı, 1995-2014 yılları arasında on iki Latin Amerika ülkesinde ticaretin serbestleşmesinin toplumsal cinsiyet ücret farkı üzerindeki etkilerini analiz etmektir. Bu bağlamda, Latin Amerika ülkelerinin üzerindeki etkileri incelemek için statik ve dinamik panel veri modelleri uygulanmıştır. Her iki yaklaşımdan elde edilen bulgular, ticaretin serbestleşmesinin Latin Amerika ülkelerinde toplumsal cinsiyet ücret farkını artırdığını göstermektedir. Bu nedenle, bu çalışma, ticaret ve toplumsal cinsiyet eşitsizlikleri arasındaki karmaşık dinamikleri daha iyi anlamak için alternatif teorik yaklaşımların araştırılmasının gerekliliğine dikkat çekmektedir.

Keywords

• Ticari Liberizasyon
• Cinsiyet Arası Ücret Farkı
• Latin Amerika
• Panel ARDL Modeli

References

1. Aguayo‐Tellez, E. (2012). The impact of trade liberalization policies and FDI on gender inequalities: a literature review. World Development Report Background Papers.
2. AlAzzawi, S. (2013, October). Did trade liberalization benefit female workers? Evidence on wage and employment effects from Egypt. In Economic Research Forum.
3. Artecona, R. & Cunningham, W. (2002). Effects of Trade Liberalization on the Gender Wage Gap in Mexico. World Bank.
4. Baltagi, B. H., & Hashem Pesaran, M. (2007). Heterogeneity and cross section dependence in panel data models: theory and applications introduction. Journal of Applied Econometrics, 22(2), 229-232.
5. Becker, G. S. (1957). The economics of discrimination. University of Chicago Press.
6. Berik, G., Rodgers, Y. V. D. M., & Zveglich, J. E. (2004). International trade and gender wage discrimination: Evidence from East Asia. Review of Development Economics, 8(2), 237-254.Berik, G. (2011). Gender aspects of trade. Trade and Employment, 171-211.
7. Black, S. E., & Brainerd, E. (2004). Importing equality? The impact of globalization on gender discrimination. Industrial and Labor Relations Review, 57(4), 540-559.
8. Breusch, T. S., & Pagan, A. R. (1980). The Lagrange multiplier test and its applications to model specification in econometrics. The Review of Economic Studies, 47(1), 239-253.

9. CEPAL. (2024). Women’s economic autonomy and international trade: evidence from Latin America and the Caribbean. Retrieved 28 October, 2024, from https://www.cepal.org/sites/default/files/document/files/nicole_bidegain_dag-cepal_wto_chairs_course_20211123.pdf
10. De Hoyos, R. E., & Sarafidis, V. (2006). Testing for cross-sectional dependence in panel-data models. The Stata Journal, 6(4), 482-496.
11. De Hoyos, R. E., Bussolo, M., & Núñez, O. (2012). Exports, gender wage gaps, and poverty in Honduras. Oxford Development Studies, 40(4), 533-551.
12. Goldberg, P. K., & Pavcnik, N. (2007). Distributional effects of globalisation in developing countries. Journal of Economic Literature, 45(1), 39-82.
13. Grajek, M. (2003). Gender pay gap in Poland. Economics of Planning, 36, 23-44.
14. Gupta, N. D. (2002). Gender, pay and development: A cross-country analysis. Labour and Management in Development, 3, 1-19.
15. Hausman, J. A. (1978). Specification tests in econometrics. Econometrica: Journal of the Econometric Society, 1251-1271.
16. Heckscher, E.F. and Ohlin, B.G. (1991). Heckscher-Ohlin trade theory. The MIT Press.
17. Herzer, D., Vollmer, S., & Martínez-Zarzoso, I. (2006). Problems in applying dynamic panel data models: Theoretical and empirical findings (No. 140). Ibero-America Institute for Economic Research.
18. Im, K. S., Pesaran, M. H., & Shin, Y. (2003). Testing for unit roots in heterogeneous panels. Journal of Econometrics, 115(1), 53-74.
19. Joekes, S., & Weston, A. (1994). Women and the new trade agenda. New York: UNIFEM
20. Jolliffe, D., & Campos, N. F. (2005). Does market liberalisation reduce gender discrimination? Econometric evidence from Hungary, 1986–1998. Labour Economics, 12(1), 1-22.
21. Kecmanovic, M., & Barrett, G. F. (2011). The gender wage gap during Serbia's transition. Comparative Economic Studies, 53, 695-720.
22. Korinek, J. (2005). Trade and gender. Issues and Interactions Trade Policy Working.
23. Leaker, D. (2008). The gender pay gap in the UK. Economic & Labour Market Review, 2, 19-24.
24. Marchand, M. H. (1996). Reconceptualising gender and development in an era of globalisation. Millennium, 25(3), 577-603.
25. Mears, R. R. (1995, November). The impact of globalization on women and work in the Americas. In Inter-American Bar Association Conference XXXII. Quito, Ecuador.
26. Meyer, L. B. (2007). International trade liberalization and gender wage inequality: A cross-national analysis 1975-1998. Women and International Development, Center for Gender in Global Context, Michigan State University.
27. Nelson, C. R., & Plosser, C. R. (1982). Trends and random walks in macroeconomic time series: some evidence and implications. Journal of Monetary Economics, 10(2), 139-162.
28. Neumayer, E., & De Soysa, I. (2007). Globalisation, women's economic rights and forced labour. World Economy, 30(10), 1510-1535.
29. Nicita, A. (2008). Who benefits from export-led growth? Evidence from Madagascar's textile and apparel industry. Journal of African Economies, 17(3), 465-489.
30. Oostendorp, R. H. (2009). Globalization and the gender wage gap. The World Bank Economic Review, 23(1), 141-161.
31. Park, H. M. (2011). Practical guides to panel data modeling: a step-by-step analysis using stata. Public Management and Policy Analysis Program, Graduate School of International Relations, International University of Japan, 12, 1-52.
32. Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of Applied Econometrics, 22(2), 265-312.
33. Pesaran, M. H., & Smith, R. (1995). Estimating long-run relationships from dynamic heterogeneous panels. Journal of Econometrics, 68(1), 79-113.
34. Pesaran, M. H., Shin, Y., & Smith, R. P. (1999). Pooled mean group estimation of dynamic heterogeneous panels. Journal of the American Statistical Association, 94(446), 621-634.
35. Phillips, P. C., & Sul, D. (2003). Dynamic panel estimation and homogeneity testing under cross section dependence. The Econometrics Journal, 6(1), 217-259.
36. Rasekhi, S., & Hosseinmardi, H. (2012). An impact of globalization on gender wage inequality: a case study of selected developing countries. International Journal of Business and Development Studies, 4(1), 27-40.
37. Samargandi, N., Fidrmuc, J., & Ghosh, S. (2015). Is the relationship between financial development and economic growth monotonic? Evidence from a sample of middle-income countries. World Development, 68, 66-81.
38. Sarafidis, V., & Wansbeek, T. (2012). Cross-sectional dependence in panel data analysis. Econometric Reviews, 31(5), 483-531.
39. Schmidpeter, B. (2017). EC968: Panel data analysis, week 3 notes. Retrieved September 10, 2017, from http://orb.essex.ac.uk/ec/ec968/
40. Seguino, S. (2000). The effects of structural change and economic liberalisation on gender wage differentials in South Korea and Taiwan. Cambridge Journal of Economics, 24(4), 437-459.
41. Siddiqui, R. (2009). Modeling gender effects of Pakistan's trade liberalization. Feminist Economics, 15(3), 287-321.
42. Shrestha, M. B., & Bhatta, G. R. (2018). Selecting appropriate methodological framework for time series data analysis. The Journal of Finance and Data Science, 4(2), 71-89.
43. Suanes, M. (2016). Foreign direct investment and income inequality in Latin America: A sectoral analysis. Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe.
44. Torres-Reyna, O. (2007). Panel data analysis fixed and random effects using Stata (v. 4.2). Data & Statistical Services, Priceton University, 112(1), 1-40.
45. Ventura-Dias, V. (2010). The gender implications of trade liberalization in Latin America. Beyond Barriers, The International Institute for Sustainable Development, Winnipeg, Manitoba Canada.
46. United Nations Development Programme (2015). Human development index. Retrieved August 10, 2017 from https://genderdata.worldbank.org/en/indicator/sg-gen-parl-zs.
47. United Nations Trade and Development (2015). Market concentration and structural change indices of exports. Retrieved August 10, 2017 https://unctadstat.unctad.org/datacentre/dataviewer/US.ConcentStructIndices.
48. Ward K. (1984). Women in the World-System: Its impact on status and fertility. New York: Praeger
49. Wolszczak‐Derlacz, J. (2013). Mind the gender wage gap–the impact of trade and competition on sectoral wage differences. The World Economy, 36(4), 437-464.
50. World Bank Group (2015). World Bank national accounts data, Trade (% of GDP). Retrieved August 10, 2017 from https://data.worldbank.org/indicator/NE.TRD.GNFS.ZS.
51. World Bank Group (2015). Foreign direct investment, net inflows (% of GDP). Retrieved August 10, 2017 from https://data.worldbank.org/indicator/BX.KLT.DINV.WD.GD.ZS?locations=XO.
52. World Bank Group (2015). Proportion of seats held by women in national parliaments (%). Retrieved August 10, 2017 from https://genderdata.worldbank.org/en/indicator/sg-gen-parl-zs.
53. Yahmed, S. B. (2012). Gender wage gaps across skills and trade openness. AMSE Working Paper, 32.