Gendered Impacts of FDI Liberalization in Developing Countries
Friday, Jan. 6, 2023 2:30 PM - 4:30 PM (CST)
- Chair: Jessica Leight, International Food Policy Research Institute
FDI Liberalization, Structural Change, and Marriage Market Outcomes
AbstractThis paper provides novel evidence about the effects of the liberalization of foreign direct investment regulation in China on gendered patterns of structural transformation between 1990 and 2015. We construct a Bartik-style liberalization measure using baseline patterns of labor allocation across sectors and newly coded data on four waves of liberalization over time. Using micro-level data from the China population census, we demonstrate that liberalization of FDI regulation is associated with substitution from agricultural to non-agricultural employment for both men and women. While the labor market effects are of roughly equal magnitude, we also observe a substantial decrease in the probability of marriage and childbearing only for women, concentrated among women who are entering their prime child-bearing years at the moment of peak liberalization.
The Effects of International Scrutiny on Manufacturing Workers: Evidence from the Rana Plaza Collapse in Bangladesh
AbstractAfter the tragic factory collapse of Rana Plaza in 2013, both the direct reforms and indirect responses of retailers have plausibly affected workers in the Ready Made Garment (RMG) sector in Bangladesh. These responses included a minimum wage increase, high profile but voluntary audits, and an increased reluctance to subcontract to smaller factories. This paper estimates the net impact of these responses using six rounds of the Labor Force Survey and a triple difference approach that compares garment workers to non-garment workers, in districts containing the vast majority of export garment factories versus other districts, pre versus post Rana Plaza. As intended by the reforms, we find that increased international scrutiny improved working conditions by 0.80 standard deviations. In contrast with what the theory of compensating differentials would suggest, we do not find that workers' wages were negatively impacted: instead, the post-Rana Plaza responses increased wages by about 10%.
Protection for Whom? Trade, Labor Enforcement and Gender Disparities in the Labor Market
AbstractBy Brazilian labor law, employers are mandated to provide maternity leave to female employees. In addition, social norms in the country are such that women are expected to care for sick and young household members. For these reasons, among others, employing female workers formally is more expensive than employing male workers formally. In this setting, we consider the implications of a real exchange rate shock, increasing openness to foreign markets, on the formalization of men and women. We hypothesize that the exchange rate shock, given labor institutions in Brazil, will disproportionately benefit men as formal employment opportunities expand. By contrast, we expect a differential expansion in self-employment (contract work) among Brazilian women, as firms circumvent key female-specific labor policies. In this sense, our work highlights a potential consequence of quality labor practice to protect women on the women themselves.
International Food Policy Research Institute
- F2 - International Factor Movements and International Business
- O1 - Economic Development