By Hussein Mousa | Contributing Writer
Women’s participation in the labor force is known to impact macroeconomic outcomes, such as aggregate output, consumption and saving, government spending. Additionally, reducing barriers to women’s participation in the labor market leads to stronger economic growth and less gender inequality. In return, economic policies such as trade liberalization could contribute to the advancement of women’s position in the economy and the reduction of the overall level of gender inequality in a certain society.
Trade liberalization, or trade openness, refers to the removal or reduction of trade barriers between countries, including tariffs and other restrictions on the flow of goods and services. In recent years, many economies have opened their borders to engage in international trade to reap the benefits of trade liberalization. However, much debate has been made about the mutual advantages of trade openness to the trading countries involved on one hand, and its contributions to wage inequality, increased unemployment, and worker exploitation on the other.
The relationship between trade liberalization and gender inequality can be even more complex and dependent on the structure of the economic sectors in the country that ought to witness such trade openness. It can also hinge upon the existing social status quo and gender norms.
According to Kis-Katos, Pieters, and Sparrow (2018), gender inequalities can be influenced by trade liberalization. With free trade, countries gain access to new technology that can create job opportunities for women. Technological advancements achieved through trade openness can be tailored to a particular gender, such as importing machines that require more dexterity and less physical strength, which is often associated with women. This can lead to an increase in demand for female workers who are better suited to these new tasks.
Kis-Katos et al. (2018) did some related research on Indonesia in 2018 and found that reducing import tariffs had a positive effect on the labor market there. Basically, it helped reduce poverty, especially in the districts where the tariff cuts were the biggest. This happened across different parts of the economy, but it had the most significant impact in areas where there used to be a lot of protection. However, the rate of women participating in the labor force in Indonesia has been constant for the past 25 years, staying at around 50%, while the rate for men has been around 80%. This is surprising because women are now more educated and having fewer children, which should make it easier for them to work. Still, cultural, and social barriers have prevented women from joining the workforce.
Mukhopadhyay (2018) also highlighted that if women are already heavily involved in agriculture and do not value their household work as much as men do, then cutting tariffs may increase their participation in the workforce. This would even give women more bargaining power to negotiate better wages and help narrow the gender pay gap.
In conclusion, liberalization can have both positive and negative effects on gender inequality, and its impact is complex and dependent on various factors. Reducing trade barriers can lead to more labor opportunities for women, and more global trade can lead to more economic development, raising investments and income levels, which decreases gender differences in human capital investments. To ensure that overall globalization promotes gender equality and women’s empowerment, policymakers and stakeholders must address the root causes of gender inequality and challenge traditional gender norms and stereotypes. The promotion of gender equality requires a concerted effort from all stakeholders, including governments, civil society, the private sector, and individuals.