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Trade Liberalisation and Women’s Employment Intensity

Analysis of India’s Manufacturing Industries

Purna Banerjee (purna@igidr.ac.in) and C Veeramani (veeramani@igidr.ac.in) teach at the Indira Gandhi Institute of Development Research, Mumbai.

Whether trade can be used as an instrument for generating greater employment opportunities for women is an important question for policymakers in developing countries. This paper analyses the role of various trade-related factors in determining female employment intensity in a panel of India’s manufacturing industries during 1998–2011. Import tariff rate is found to exert a negative effect on female employment intensity, supporting the hypothesis that firms, when exposed to international competition, tend to reduce costs by substituting male with female workers. Further, the relative demand for female workers increases to the extent that trade liberalisation leads to resource reallocation in favour of unskilled labour-intensive industries. By contrast, greater use of new technology biases the gender composition of workforce against females. Liberalisation has not led to large growth of female employment in India because the resource reallocation effect has not been strong enough to offset the negative technology effect.

We would like to thank an anonymous referee of this journal for constructive comments. Earlier versions of this paper were presented at the 55th Indian Society of Labo ur Economics Conference 2013, New Delhi; IMR Doctoral Conference, Indian Institute of Management, Bangalore; and IGIDR Silver Jubilee Conference, Mumbai. This is a substantially revised version of IGIDR Working Paper No: WP–2015–018.

Updated On : 13th Sep, 2017

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