Does Trade Liberalisation Leave Women Behind in South Africa: A Gendered CGE Analysis

Despite the general presumption in favor of trade liberalization, the question of how to implement it in a way to ensure equitable income distribution and sustainable poverty alleviation in developing countries is at the core of the current trade debate. We build a macroeconomic framework that integrates both market and non-market activities, while distinguishing male and female workers throughout, in order to evaluate impacts of tariffs elimination on the well-being of men and women in South Africa. Our study reveals a strong gender bias against women with a decrease in their labor market participation, while men participate more in the market economy. This strong result is due to the fact that female workers are concentrated in contracting sectors which were initially among the protected sectors, and which benefit little from the fall in input prices. In contrast, male workers are more concentrated in the expanding export-intensive sectors. Female market participation drops particularly for black African women, as they are more concentrated in contracting female-intensive sectors. As male labor market participation and real wages increase more than for their female counterparts, their income share increases within the household. This is likely to reduce the bargaining power of women in their households although this is not modeled explicitly in this study. Women will continue to suffer from heavy time burden within the households with trade liberalization. Therefore, Government should design complementary fiscal policies to reduce the time burden of women through measures promoting the consumption of time saving technologies and improving their productivity, and to increase female market participation and employment to ensure equitable income distribution among men and women, thus contributing to poverty reduction.