The Gender Impact of Trade on Employment in Least Developed Countries

Trade liberalization leads to changes in relative prices and the sectoral structure of an economy. These changes imply gendered employment effects mainly due to the unequal distribution of skills by gender in the labor market. It might also be the case that women workers are preferred over men in certain sectoral settings to take advantage of women’s relatively low wages as a source of competitiveness in international markets. Least developed countries (LDCs) consist of the most disadvantaged economies among developing countries. This paper investigates the gendered employment effects of trade openness in the case of LDCs. Specifically, the paper estimates the impact of trade openness measures (e.g., trade ratio, export ratio, import ratio) on the female share of employment in broad economic sectors (i.e., agriculture, industry, services) using panel data analysis covering the period of 2000-2022 for 28 LDCs for which balanced panel data is available. The findings of the empirical analysis show that export share has a statistically significant and negative association with women’s share of employment in agriculture and services. The adverse impact on the female intensity of employment in agriculture may be due to gender segregation by crop observed in most LDCs. There is a positive association between import share and female intensity of employment in services. Overall, income level and demographic factors such as fertility, population growth and urbanization play a more significant role than trade openness measures in explaining the female intensity of employment in broad economic sectors in LDCs.