## Trade Drives Gender Equality and Development

## Source details

**Canonical URL:** [Trade Drives Gender Equality and Development](https://www.imf.org/en/publications/fandd/issues/2023/06/trade-drives-gender-equality-and-development-rocha-piermartini)

## Other formats

- [Markdown version](/en/publications/fandd/issues/2023/06/trade-drives-gender-equality-and-development-rocha-piermartini/index.md)
- [Structured JSON version](/en/publications/fandd/issues/2023/06/trade-drives-gender-equality-and-development-rocha-piermartini/index.json)
- [Bundle manifest](/en/publications/fandd/issues/2023/06/trade-drives-gender-equality-and-development-rocha-piermartini/bundle-manifest.json)

## Bibliographic details
- Authors: NADIA ROCHA, ROBERTA PIERMARTINI
- Published: June 1, 2023

---

### Framing and motivation
- Gender equality is both a fundamental right and an economic imperative; reducing gender gaps yields larger gains in developing economies because levels of inequality are higher and potential rewards from closing gaps are greater.
- International trade is positioned as a promising policy lever to boost women’s economic participation, reduce inequality, and expand access to skills and education.
- Research progress has been constrained by a dearth of sex-disaggregated data on consumption, occupations, and sectoral employment; the World Bank–WTO report "Women and Trade" seeks to address this gap and provide a framework for analysis.

### How trade affects women — empirical findings
- Exporters employ more women:
  - In developing economies, women comprise 33 percent of the workforce of exporting firms versus 24 percent in non-exporting firms.
  - Firms in global value chains or with foreign investors employ on average 11 to 12 percent more women compared with other firms.
- Trade raises women’s wages and can reduce economic inequality:
  - Doubling the value of exports in a country’s manufacturing sector would increase the average female wage share from 24 to roughly 30 percent.
  - World Bank models on the African Continental Free Trade Area suggest that by 2035 wages for skilled and unskilled female labor could be 4 percent and 3.7 percent higher (relative to baseline), compared with a 3.2 percent increase for male workers at all skill levels.
- Trade creates better jobs and formalization advantages for women:
  - 13 percent of women in highly integrated sectors work informally, compared with 20 percent in less integrated sectors.
  - For men, informality falls from 9.5 percent in less integrated sectors to 5.0 percent in highly integrated sectors.
- Trade openness increases women’s incomes and consumption:
  - Eliminating import tariffs raises average real income for female-headed households compared with male-headed households in more than three-quarters of the 54 developing economies analyzed.
  - On average, real income gains from removing import tariffs would be 2.5 percent greater for households headed by women than for those headed by men.
  - In countries such as Burkina Faso and Cameroon, this increase is equivalent to one year’s spending on education or health.

### Global trends expanding opportunities for women
- Expansion of services:
  - Services employ a larger share of women than agriculture and manufacturing.
  - Services trade is expanding faster than goods trade; services now create the most jobs and do so earlier in development.
  - International Labour Organization statistics: in 2000, 46 percent of all services sector workers were women, rising to about 58 percent by 2020.
- Global value chains (GVCs):
  - GVCs create better jobs and connectivity for female-run micro and small businesses and small-scale farmers.
  - Women in GVCs have a 10 percentage point higher probability of being in the formal workforce than women in sectors not highly integrated.
- Digital trade and platforms:
  - Digital technologies help women overcome constraints (limited access to finance, education, mobility, flexibility).
  - Example from platform data: about half of the entrepreneurs on Alibaba platforms are women, compared with a quarter among all entrepreneurs in China.
  - Growth in online education and health services increases access and employment opportunities in sectors with lower discrimination.

### Barriers and policy frictions that limit gains
- Tariff bias and "pink tariffs":
  - Female-intensive sectors (food and beverages, textiles and apparel) on average face higher tariffs on inputs.
  - In India, this "pink tariff" amounts to 6 percentage points.
- Nontariff measures and fixed-cost burdens:
  - Product standards and regulatory measures often impose fixed costs that disproportionately affect small and medium enterprises—frequently women-owned—compared with large firms.
  - Small exporters lack specialized teams, export infrequently or in small batches, and face costly administrative procedures; additional barriers include limited access to trade financing and higher exposure to extortion and physical harassment at the border.
- Complementary constraints:
  - Time constraints and limited geographic mobility due to family caregiving roles reduce women’s ability to capture trade gains unless addressed by coordinated policy.

### Policy recommendations and reforms
- Trade policy and facilitation:
  - Adjust tariff policy to close gender gaps in input tariffs.
  - Streamline regulatory requirements and trade facilitation to reduce fixed-cost burdens for small exporters.
- Broader enabling policies:
  - Improve access to education, financial resources, digital technologies, and information for women.
  - Design coordinated and complementary policies that address specific barriers (time constraints, mobility limits) to ensure women can maximize trade benefits.
- Labor market and adjustment policies:
  - Implement complementary labor market policies to help women acquire new skills or relocate as comparative advantages shift due to trade-related disruptions.
- International cooperation:
  - Advance cooperation on gender-informed trade policy and trade facilitation to promote gender equality without necessarily targeting women explicitly.

### Risks, recent shocks, and the need for continued data and research
- Pandemic impacts:
  - In 2020 the pandemic destroyed 4.2 percent of women's employment worldwide (a drop of 54 million jobs), compared with 3 percent for men (a drop of 60 million jobs).
  - Women lost $800 billion in income (not accounting for informal earnings).
  - Pandemic shocks disproportionately affected sectors that employ more women and increased caregiving burdens due to childcare and school closures, though teleworking mitigated some effects.
  - Pandemic-driven investment in digital technologies may expand women’s opportunities in trade.
- Geopolitical and protectionist risks:
  - Rising protectionist pressures, GVC reshaping, and geopolitical tensions threaten to reverse gender-equality gains; open trade will be essential to a gender-inclusive recovery.
- Research and data needs:
  - Additional studies of trade’s impact on women are required to design targeted policies; this analysis depends on more and better gender-disaggregated data.

*Source: F&D Magazine, June 2023 — Nadia Rocha and Roberta Piermartini.*

---

## Content in this bundle

- **Trade Drives Gender Equality and Development**
  - [Trade Drives Gender Equality and Development (Markdown version)](/-/media/files/publications/fandd/article/2023/june/rocha.pdf.md){rel="alternate" type="text/markdown"}
  - [Trade Drives Gender Equality and Development (PDF)](/-/media/files/publications/fandd/article/2023/june/rocha.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/fandd/issues/2023/06/trade-drives-gender-equality-and-development-rocha-piermartini_