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Trade liberalisation and women's employment intensity: Analysis of India's manufacturing industries

Author

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  • Purna Banerjee

    () (Indira Gandhi Institute of Development Research)

  • C. Veeramani

    () (Indira Gandhi Institute of Development Research)

Abstract

In the context of increasing contribution of developing countries in world trade, an important question is whether trade can be used as an instrument to stimulate higher participation of women in the labour market? Trade and industrial liberalization undertaken during the 1990s and 2000s marked the end of India's nearly four decade experiment with state directed, heavy industry based, and import substituting industrialization. In this context, we analyse the role of various trade and technology related factors in determining female employment intensity (FEI), in a panel of India's manufacturing industries for the period 1998-2008. We find that import tariff rates exert a negative effect on FEI, 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 liberalization leads to resource reallocation in favour of unskilled labour intensive industries where India holds comparative advantage. By contrast, greater use of new technology and capital intensive production biases the gender composition of workforce against females. Liberalization has not led to large growth of female employment in India's organized manufacturing sector because the resource reallocation effect has not been strong enough to offset the negative technology effect.

Suggested Citation

  • Purna Banerjee & C. Veeramani, 2015. "Trade liberalisation and women's employment intensity: Analysis of India's manufacturing industries," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2015-018, Indira Gandhi Institute of Development Research, Mumbai, India.
  • Handle: RePEc:ind:igiwpp:2015-018
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    File URL: http://www.igidr.ac.in/pdf/publication/WP-2015-018.pdf
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    References listed on IDEAS

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    Cited by:

    1. Ghani,Syed Ejaz & Grover,Arti & Kerr,Sari & Kerr,William Robert, 2016. "Will market competition trump gender discrimination in India ?," Policy Research Working Paper Series 7814, The World Bank.

    More about this item

    Keywords

    female employment intensity; trade liberalization; manufacturing; India;

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor

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