Globalization and the Gender Earnings Gap: Evidence from Sri Lanka and Cambodia

56 Pages Posted: 28 Dec 2016

See all articles by Yevgeniya Savchenko

Yevgeniya Savchenko

Georgetown University; World Bank

Gladys Lopez-Acevedo

Lead Economist

Raymond Robertson

Texas A&M University

Date Written: December 27, 2016

Abstract

Disasters in Bangladesh and protests elsewhere have created an intense debate about the value, particularly to women, of apparel employment in developing countries. This paper focuses on how the forces of globalization, specifically the Multi-Fibre Arrangement (MFA), have affected women's wages in the apparel sector in developing countries. The paper uses household and labor force surveys from Cambodia and Sri Lanka to estimate both apparel wage premiums relative to other industries and the male-female wage gap before and after the end of the MFA. The approach builds on new models that apply traditional trade theory (e.g., the Heckscher-Ohlin and Stolper-Samuelson theorems) to analyze the effect of globalization on gender-based earnings. The authors find large positive wage premiums and a closing of the male-female wage gap during the MFA period, but smaller premiums and a widening wage gap after the end of the MFA. The results suggest that the benefits of apparel exports for women in developing countries remain significant post-MFA. They also model an approach for studying the effects of globalization that differentiates males and females as separate factors. This may be a fruitful alternative to discrimination models or those that analyze the effects of globalization on women in terms of skill. Further research is necessary to identify the potential development effects of post-MFA apparel employment and to thoroughly compare the benefits documented in this paper with the costs that may come with apparel jobs.

Keywords: International Trade and Trade Rules, Inequality

Suggested Citation

Savchenko, Yevgeniya and Lopez-Acevedo, Gladys and Robertson, Raymond, Globalization and the Gender Earnings Gap: Evidence from Sri Lanka and Cambodia (December 27, 2016). World Bank Policy Research Working Paper No. 7930, Available at SSRN: https://ssrn.com/abstract=2890713

Yevgeniya Savchenko (Contact Author)

Georgetown University ( email )

Washington, DC 20057
United States

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

HOME PAGE: http://web.worldbank.org/WBSITE/EXTERNAL/WBI/WBIPROGRAMS/ICLP/0,,contentMDK:20993220~pagePK:64156158

Gladys Lopez-Acevedo

Lead Economist ( email )

1818 H Street
Washington, DC 20433
United States

HOME PAGE: http://www.worldbank.org/en/about/people/gladys-lopez-acevedo

Raymond Robertson

Texas A&M University ( email )

TAMU 4220
1004 George Bush Dr West
College Station, TX 77843
United States

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