BRIEF March 8, 2019

Trade & Gender

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Gender equality is important for economic growth

The case for gender equality has never been more apparent. Despite representing half the world’s population, women and girls still face inequalities that stifle social and economic progress. Women are one-half of the world’s population but only contribute to 37 percent of the global GDP. An economy cannot operate at its full potential if half of its population cannot fully contribute to it.

Improving gender equality positively impacts GDP, results in  higher employment levels and increases productivity. Overall, the economic gender gap narrowed in 2018, but the Global Gender Gap Report shows that progress towards gender parity continues to be slow. If we keep pace with current trends, the overall global gender gap can be closed in 108 years.

Trade and investment can be powerful drivers of gender equality

Inclusive trade is a critical component to achieving gender parity. It creates more job opportunities for women with higher wages and better working conditions. Recent research reveals the following evidence:

  • Globally engaged firms are larger, more productive, more capital intensive and pay higher wages than purely domestic firms.
  • Formal jobs in exporting sectors tend to be more skill-intensive and have higher salaries than jobs in the informal sector.  For example, in India IT firms offers high-paying employment opportunities for the young and educated labor force, particularly for women professionals, in order to comply with international norms.
  • As trade increases in sectors such as textiles, garments and tourism, job opportunities for women expand. For example, the trade-led expansion of Lesotho’s apparel industry created 38,000 jobs from 1999 to 2004 and most of them were filled by women.
  • A recent study on the high-tech medical devices sector shows that female jobs hold steady as the sector upgrades into higher value products and as wages rise. Gender sensitive policies in terms of access to education and supportive maternity leave contributed to the high female participation.
  • Women employed by companies who trade get  access to training and technology otherwise unavailable to them. In addition, because trade creates job opportunities for skilled workers, it increases the incentive to undertake additional training or staying in school.

Women’s involvement in trade negotiations is key to ensure women fully gain from trade and that their voices and entrepreneurial interests are taken into account.

Digital Technology and Trade

Digital technologies and trade platforms can be transformative forces for global trade and commerce, and while they may simultaneously affect men and women, their impact on women can be different due to the special characteristics of women as workers, traders and consumers. Leveraging digital technology to empower women’s businesses, including small businesses, can help drive economic growth and create jobs.  

The internet opens new opportunities for women to trade in services and provides the flexibility to overcome time and mobility constraints. Today, for example, four in ten online shop owners on Alibaba, the Chinese e-commerce giant, are women.

However, technology can also be biased in favor of male workers. In developing countries, women are much less likely to work in ICT because they are less likely to receive education in subjects such as science, technology, engineering and mathematics. They also have unequal access to the internet.

Entrenched obstacles hinder women from participating in trade

Women are still far from reaching the full benefits that trade could bring. According to the ILOs Global Wage Report 2018, women are still paid 20 percent less than men for the same work and their access to higher quality employment opportunities remains restricted. For instance, women entrepreneurs, particularly in developing countries, face a number of legal and cultural barriers which prevent them from participating in trade, entering the work force, setting up a business, or even owning land or assets.  

The relationship between trade policies and how different trade reforms will affect women and men is complex and understanding the channels through which trade and trade openness can have an impact on gender is key to achieve higher gender equality. Women’s involvement in trade consultation and negotiations is key to ensure women fully gain from trade and that their voices and entrepreneurial interests are taken into account .

What is the World Bank Group doing to address these constraints?

Promoting gender equality and empowering women are critical to achieving the World Bank Group’s twin goals of reducing extreme poverty and boosting shared prosperity. The World Bank Group is working on many parallel paths towards strengthening existing knowledge on the relationship between trade and gender as well as more practically assisting developing countries in their efforts to support women traders. A critical component of our work is collecting and analyzing data from a gender perspective, which will help us understand how trade and gender are linked and whether men and women are disproportionately affected - positively or negatively - by trade policies and their implementation. Ongoing initiatives include:

  • The development of a joint Trade and Gender research partnership in collaboration with the World Trade Organization;
  • Development of empirical research on the relationship between trade/investment and gender;
  • Surveys on trade barriers for female cross border traders, for both formal and informal traders;
  • Knowledge sharing through seminars, conferences and meetings;
  • The development of toolboxes, results frameworks, and implementation guides;
  • Incorporating gender indicators into trade projects and operations.