• TABLE OF CONTENTS
HIDE
 Front Cover
 Title Page
 Acknowledgement
 Table of Contents
 Executive summary
 Introduction
 The LAC bureau's trade and investment...
 Overview of the literature related...
 T&I in relation to employment and...
 Summary of research recommenda...
 Endnotes
 Glossary of terms
 Annex A: Data tables
 Annex B: Selected statistics on...
 Bibliography














Group Title: Genesys special studies
Title: Gender and trade & investment promotion in Latin America and the Caribbean
CITATION THUMBNAILS PAGE IMAGE ZOOMABLE
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Permanent Link: http://ufdc.ufl.edu/UF00089864/00001
 Material Information
Title: Gender and trade & investment promotion in Latin America and the Caribbean an overview of the literature
Series Title: Genesys special studies
Physical Description: 94 leaves in various pagings : ; 28 cm.
Language: English
Creator: Mulhern, Mary
Mauzé, Suzanne
United States -- Agency for International Development
GENESYS Project
Donor: Marianne Schmink ( endowment )
Publisher: Office of Women in Development, Bureau for Research and Development, Agency for International Development,
Office of Women in Development, Bureau for Research and Development, Agency for International Development
Place of Publication: Washington D.C
Publication Date: 1992
Copyright Date: 1992
 Subjects
Subject: Sex discrimination in employment -- Latin America   ( lcsh )
Sex discrimination in employment -- Caribbean Area   ( lcsh )
Foreign trade and employment -- Caribbean Area   ( lcsh )
Women in development -- Latin America   ( lcsh )
Women in development -- Caribbean Area   ( lcsh )
Foreign trade and employment -- Latin America   ( lcsh )
Sexual division of labor -- Latin America   ( lcsh )
Sexual division of labor -- Caribbean Area   ( lcsh )
Genre: federal government publication   ( marcgt )
bibliography   ( marcgt )
statistics   ( marcgt )
non-fiction   ( marcgt )
 Notes
Statement of Responsibility: Mary Mulhern, Suzanne Mauzé.
General Note: "The Genesys Project, December 1992."
General Note: "Submitted to: Office of Women in Development and Bureau for Latin America and the Caribbean, Agency for International Development, Contract No. PDC-0100-Z-00-9044-00."
 Record Information
Bibliographic ID: UF00089864
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: oclc - 31298813

Table of Contents
    Front Cover
        Front Cover 1
        Front Cover 2
    Title Page
        Title Page
    Acknowledgement
        Acknowledgement
    Table of Contents
        Table of Contents 1
        Table of Contents 2
        Table of Contents 3
    Executive summary
        Page i
        Page ii
        Page iii
    Introduction
        Page 1
        Page 2
    The LAC bureau's trade and investment initiative
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
    Overview of the literature related to gender and T&I
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
    T&I in relation to employment and gender
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
        Page 25
        Page 26
        Page 27
        Page 28
        Page 29
        Page 30
        Page 31
        Page 32
        Page 33
        Page 34
        Page 35
    Summary of research recommendations
        Page 36
        Page 37
        Page 38
        Page 39
        Page 40
        Page 41
        Page 42
    Endnotes
        Page 43
        Page 44
        Page 45
        Page 46
    Glossary of terms
        Page 47
        Page 48
        Page 49
        Page 50
        Page 51
        Page 52
    Annex A: Data tables
        Page 53
        Page 54
        Page 55
        Page 56
        Page 57
        Page 58
    Annex B: Selected statistics on women and men in the LAC region
        Page 59
        Page 60
        Page 61
        Page 62
        Page 63
        Page 64
        Page 65
    Bibliography
        Page 66
        Page 67
        Page 68
        Page 69
        Page 70
        Page 71
        Page 72
        Page 73
        Page 74
        Page 75
        Page 76
        Page 77
        Page 78
        Page 79
        Page 80
        Page 81
        Page 82
        Page 83
        Page 84
        Page 85
        Page 86
        Page 87
        Page 88
        Page 89
        Page 90
        Page 91
Full Text









"Property of
Tropical Research &
Development, Inc. Library"


Gender and Trade & Investment
in Latin America and the Caribbean
An Overview of the Literature


Prepared for the U.S. Agency
for International Development
Office oi Women in Development
and Bureau for Latin America and the
Caribbean


December 1992


GENESYS


Special Studies No. 8


MIN
o: c.









The GENESYS Special Studies Series


No. 1 Women and the Law in Asia anc' the Near East (Lynn P. Freedman)

No. 2 The Role of Women in Evolving Agricultural Economies of Asia and the
Near East: implicationss for A. D. 's Strategic Planning (lnji Z. Islam and
Ruth Dixon-Mueller)

No. 3 Lessons Learned from the Advanced Developing Countries (Susan P.
Joekes)

No. 4 Women's Income, Fertility, and Development Policy (Boone A. Turchi,
Mary T. Mulhern, and Jacqueline J. Mahal)

No. 5 Investing in Female Education for Development (Jere R. Behrman)

No. 6 Women and the Transition to Democracy in Latin America and the
Caribbean: A Critical Overview (GENESYS)

No. 7 Gender and Agriculture & Natural Resource Management in Latin
America and the Caribbean: An Overview of the Literature (GENESYS)

No. 8 Gender and Trade & investment in Latin America and the Caribbean: An
Overview of the Literature (Mary T. Mulhern and Suzanne B. Mauzd)

No. 9 Democracy and Gender: A Practical Guide for Application to U.S.A.I.D.
Programs (David Hirschmannl






Series Supporting Materials:

* Bibliography: Gender Issues in Latin America and the Caribbean (Suzanne B.
Mauz6l

* Institutions Working in Gender Issues in Latin America and the Caribbean
(Suzanne B. Mauz6 and Mary T. Mulhern)

* Case Study: Gender, Industrializaticn, and the Labor Force in Ecuador
(CEPLAES)

* Case Study: Gender and Democracy in Honduran Municipalities (CEPROD)
















GENDER AND TRADE & INVESTMEiNT PROMOTION

IN LATIN AMERICA AND THE CARIBBEAN:

AN OVERVIEW OF THE LITERATURE










The GENESYS Project

December 1992



Mary Mulhern
Suzanne Mauz6
The Futures Group












Submitted to:
Office of Women in Development and
Bureau for Latin America and the Caribbean
Agency for International Development
Contract No. PDC-0100-Z-00-9044-00












ACKNOWLEDGEMENTS


This paper was produced as part of a GENESYS research effort for A.I.D.'s LAC Bureau to
identify gaps in knowledge about women in development in the region and to develop a research plan for
the Bureau. GENESYS wishes to thank Ngina Chiteji, Tania Dmytraczenko, Rob Hollister, and Theresa
Smith for their thoughtful comments on a draft of this paper; also Mary Beth Alien, LACTTI, Edgar
Ariza-Niiio, R&D/WID, Angel Chiri, LAC/DRIE, Rosalie Norem, R&D/WID, Rich Rosenberg,
USAID/Bolivia, Ron Stryker, LAC/TI, and the members of the LAC Bureau Women in Development
Working Group for their input at various stages of paper development. The authors gratefully
acknowledge the editing and organizational assistance of Constance McCorkle, as well as the many
substantive contributions of Pat Martfn, LAC/DPP. The views and interpretations expressed in this paper
are those of the authors and should not be attributed to the Agency tor International Development.
GENESYS welcomes any comments.


The GENESYS Project
The Futures Group
One Thomas Circle, 6th Floor
Washington, D.C. 20005
Phone: (202) 775-9680
Fax: (202) 775-9694


Office of Women in Development
Bureau for Research and Development
Agency for International Development
Washington, D.C. 20523-"041
Phone: (703) 8754474
Fax: (703) 875-4633


GENESYS (Gender in Economic and Social Systems) is an A.I.D. funded project supporting
A.l.D.'s efforts to integrate women into the natio;:al economies of developing countries
around the world. The project provides assistance to A.I.D. staff worldwide in reviewing,
initiating, or expanding gender considerations in development activities for sustainable
economic and social development. Project components include technical assistance, training,
policy research and evaluation, and information dissemination and communications. The
sectoral foci are private enterprise, democratization, agriculture and rural development, and
environment/natural resource management.











TABLE OF CONTENTS


Paze

EXECUTIVE SUMMARY

1. INTRODUCTION 1

1.1 Organization of the Report 2

2. THE LAC BUREAU'S TRADE AND INVESTMENT (T&I) INITIATIVE 3

2.1 LAC Bureau Activities 5
2.2 LAC Mission Activities 5
2.3 Summary 7

3. OVERVIEW OF THE LITERATURE RELATED TO GENDER AND T&I 9

3.1 A Framework for Identifying and Analyzing Gender Issues in T&I 9
3.2 Gender and Structural Adjustment in the 1980s 11
3.3 Gender and the Labor Force 12

4. T&I LN RELATION TO EMPLOYMENT AND GENDER 16

4.1 Sectoral Distribution 16
4.2 Occupational Segregation 18
4.3 Wage Discrimination 20
4.4 Unionization 23
4.5 The Informal Sector and Outwork 27
4.6 Occupational Safety and Health 30
4.7 Protective Legislation 3.

5. SUMMARY OF RESEARCH RECOMMENDATIONS 36


ENDNOTES 43

GLOSSARY OF TERMS


ANNEX A: Data Tables

1. Structure of Merchandise Exports (1965, 1989) A-i
2. Labor Force Participation (LFP) Rates by Gender (1990) A-1
3. Women's LFP Rates by Age Group (early-mid 1980s) A-1
4. Labor Force Share (LFS) by Gender (1990) A-2
5. Unemployment Rates and Shares by Gender (mid-1980s) A-2









6. Sectoral Distribution of the Labor Force by Gender (1980) A-3
7. Sectoral Distribution of the Labor Force in Central America (1985-1987) A-3
8. Occupational Distribution of the Labor Force by Gender (mid-1980s) A-4
9. Textiles and Clothing as Share of Merchandise Exports (1965, 1989) A-4
10. Share of Labor Force Employed in the Informal Sector (mid-1980s) A-5


ANNEX B: Selected Statistics on Women and Men in the LAC region

1. Selected Development Indicators (females per 100 males)
a. South America and Mexico B-I
b. Central Ame-ica B-2
c. The Caribbean B-2
2. Labor Force Participation Rates (%) by Gender
a. South America and Mexico B-3
b. Central America B-3
c. The Caribbean B-4
3. Sectoral Distribution of the Labor Force (%) by Gender
a. South America and Mexico B-5
b. Central America B-6
c. The Caribbean B-6


BIBLIOGRAPHY

SUPPLEMENTAL BIBLIOGRAPHY T&I and Economic Policy in the LAC Region









LIST OF BOXES



Box 1: Support for the T&I Approach in Economic Theory 4

Box 2: A Framework for Identifying and Analyzing Gender Issues in T&I 10

Box 3: Measuring the Employment Impacts of A.I.D.'s T&I Programs on Women and Men 13

Box 4: Factors Explaining Sectoral Distributions of Labor by Gender 17

Box 5: U.S. Policy on Trade Union Rights 24









EXECUTIVE SUMMARY


This paper summarizes the literature related to gender and trade and investment (T&I) i: Latin
America and the Caribbean. It was prepared at the request of the LAC Bureau's Women in Devel: ment
(WID) Working Group. The paper examines how gender concerns have been explored in the con -t of
selected topics relating to T&I generally, and suggests research that the Bureau could support to i )rm
its T&I programs.

Given the relatively recent development focus on T&I promotion, not surprisingly even an
extensive literature review reveals that few works deal specifically with gender and T&I, and they are
thinly spread across a number of disciplines. Moreover, they leave much to be desired in the way of
comparable, systematic analyses and quantitative information. In reviewing the existing literature,
however, one theme is salient: the links among T&I, labor, and gender. Scholars are beginning to raise
some critical questions regarding the differential impact of T&I promotion on the employment
opportunities, characteristics, and patterns of women and men in the labor force. Gender issues arise in
the distributions of females and males employed across sectors and occupations, in wage discrimination
within the labor force, and in other T&I-sensitive labor contexts such as support for local labor
movements, the gender implications of T&I impacts on the informal sector and industrial outwork
systems, occupational health and safety, and regulatory reform of the labor market, particularly protective
legislation for workers.

The literature offers a series of arguments for considering the direct and indirect linkages among
gender, employment, and some of the policies and programs advocated through the LAC Bureau's T&I
initiative. Two key themes permeate these arguments: LAC women's traditionally disadvantaged
position in the labor market relative to men; and the need for a well-functioning labor market with full
access to the scope and quality of human resources required to develop an internationally competitive
production base.

Following a brief introduction, Section 2 of this report describes the T&I initiative as defined by
A.I.D.'s LAC Bureau. Sections 3 and 4 highlight several topics in which gender should be considered
during T&I strategy development and program design. Section 3.1 introduces a framework for analyzing
people-level concerns in T&I, in order to identify where gender issues are important. The literature
addresses some of these concerns explicitly, but most are only hinted at or appear as recommendations
for further research. Sections 3.2 and 3.3 provide an overview of the gender issues in struct-ral
adjustment in LAC plus women's and men's relative position in the region's labor market. This sets the
stage for Section 4's in-depth review of the literature on selected gender issues related to employment and
the T&I initiative. This section also explores how consideration of gender may enhance the long term
success of T&I initiatives. Three types of gender-based discrimination pertinent to T&I are explored,
followed by a summary of gender issues arising in unionization, the informal sector and outwork,
occupational health and safety, and protective legislation.

The fifth and final section highlights gaps in our knowledge of gender and T&I issues, presenting
them as research recommendations. While many of these recommendations flow directly from the
analysis in the body of the report, others derive from suggestions and comments made by reviewers. Still
others emerge from the juxtaposition of the literature review with LAC programs and policy initiatives.
Whenever relevant, research recommendations are directly linked with the LAC Bureau's programmatic
interests. Those specific recommendations of a relatively higher priority for the Bureau appear with stars
next to them. Additionally, each has been coded with a number to reflect the level at which the









recommendation is most relevant (1) mission level, (2) bureau level, or (3) both mission and bureau
level. The justification for each recommendation and the operational implications are detailed in Section
5. A short summary of each follows below.

* Employment effects of T&I, including:

** labor requirements and employment effects associated with the introduction of productivity-
enhancing technology, and how skills profiles and targeted training can be used t: enhance the
process (1);

the effects of an open trade regime on the gender composition of the work fcrce, and the
.implications for human resource and social programs (2); and

the people-level effects of privatization, focusing on relative conditions for workers in the private
and public sector and changes in the demand for labor (2).

Discrimination in the labor market, including:

the interactions of sectoral and occupational segregation, unemployment, and gender (3);

an examination of recruitment patterns by formal sector firms in LAC to identify sources of
gender-based segregation and how to overcome it (2); and

** an assessment of how fair wage practices can be promoted through A.I.D.-supported T&I
programs, and the extent to which overt discrimination as opposed to gendered productivity
differences contribute to the wage gap between LAC women and men (3).

* Labor movements, including:

** the extent and nature of women's participation in unions in the LAC region and of unions'
effectiveness in representing women members' concerns, and creative ways in which unions
might adapt themselves to the informal sector, where large numbers of LAC women and men are
employed (3).

* Formal-informal sector linkages, including:

the incentives for both employers and employees to participate in subcontracting and outwork
arrangements, and how regulatory changes linked to T&I initiatives will affect outworking trends:
and the social and economic benefits and costs of industrial subcontracting (2).

* Occupational health and safety, including:

** gender-disaggregated information about toxic risks, occupa'icnal dise:;se and injury and the
enforcement of workplace health and safety regulations in -.;.D.-supported sectors of T&I;
health hazards related to industrial outwork; and the use of educaticnai programs for workers and
employers about workplace health and safety (1).










Protective legislation, including:


** gendered effects of protective legislation on both T&I and employment. e.g., an assessment
of the regulatory environment and an analysis of the financial and social costs of key labor
regulations; and the potential for A.I.D. dialogue about protective legislation with business or
worker associations, unions, or labor movements to influence the direction of lobbying or labor
contract negotiations (3).

Measurement tools, including:

the relationship between female intensity of the work force (women's share relative to men) and
export performance in the manufacturing sector (2); and

valid, proximate measures of informal-sector employment that can capture differences and
similarities between women and men in that sector (2).








1. INTRODUCTION: GENDER AND TRADE & INVESTMENT PROMOTION IN LAC


This paper summarizes the literature related to gender and trade and investment (T&I) in
Latin America and the Caribbean. The authors reviewed over 200 works from the 1980s and 1990s
related to gender and T&I, as well as the general T&I literature, including both A.I.D. and non-
A.I.D. documents. This review was prepared as part of a larger gender research effort for the LAC
Bureau's Women in Development Working Group. Among other topics,' the Working Group
identified T&I promotion as an initiative about which relatively little is known in relation to gender
concerns and how they should be approached in LAC T&I programs. Thus, the present overview
aims to:

examine how gender concerns have been explored in the context of selected topics relating to
T&I generally; and
suggest research the Bureau could support to inform its T&I programs.

Given the relatively recent development focus on T&I promotion, not surprisingly even an
extensive literature review reveals that works dealing specifically with gender and T&I are few, and
they are thinly spread across a number of disciplines. Moreover, they leave much to be desired in the
way of comparable, systematic analyses and quantitative information. In reviewing the existing
literature, however, one theme is salient: the links among T&I, labor, and gender. Scholars are
beginning to raise some critical questions regarding the differential impact of T&I promotion on the
employment opportunities, characteristics, and patterns of women and men in the labor force. An
example is gender discrimination in the labor market. As a recent study of labor market
discrimination in developing countries points out:

.. [gender-based] discrimination will tend to slow economic growth by reducing efficiency in the
allocation of labor among firms and the economy; by reducing the job commitment and effort of workers
who perceive themselves to be victims of injustice; and by reducing the magnitude of investments in
human capital, and the returns on those investments (Birdsall and Sabot 1991:7).

Apart from issues of distributions of females and males employed across sectors and
occupations, and wage discrimination within the labor force, gender concerns also arise in other T&I-
sensitive labor contexts such as support for local labor movements, the gender implications of T&I
impacts on the informal sector and industrial outwork systems, occupational health and safety, and
regulatory reform of the labor market, particularly protective legislation.

Reflecting the emphasis in the body of gender literature related to industrialization and T&I,
thif review focuses on employment as a critical arena of T&I/gender interactions. This focus is
justified in light of several compelling considerations.

* First, one of the primary outputs of the T&I initiative is exi -ed to be employment for both
women and men.

* Second, LAC women provide a significant proportion of the labor in a number of export-
oriented sectors (e.g., textiles and clothing, ceramics, agribusiness, electronics, chemicals and
pharmaceuticals) that will be directly sensitive to T&I interventions, as well as in the informal
sector which is likely to be heavily impacted by T&I.







Third, a number of T&I-related labor issues have long-term implications for the sustainability
of the flow of benefits from increased trade and investment to LAC countries, for the rate of
growth and development in these countries, and for the gender-based division of labor.

Fourth, although not a part of the T&I initiative, employment creation has been a major focus
of the social safety net/economic support fund (ESF) programs introduced to help alleviate
unemployment during structural adjustment. Some of these employment programs, e.g., in
Bolivia and Chile, have had skewed gender distributions, raising questions about who and
how to target as beneficiaries (Kingsbury 1991).

1.1 Organization of the Report

Section 2 introduces the T&I initiative as defined by A.I.D.'s LAC Bureau. This information
is included primarily for readers who may be unfamiliar with the initiative.

Sections 3 and 4 highlight several topics in which gender should be considered during T&I
strategy development and program design. Section 3.1 introduces a framework for analyzing people-
level concerns in T&I, in order to identify where gender issues are important. The literature
addresses some of these concerns explicitly, but most are only hinted at or appear as
recommendations for further research. Sections 3.2 and 3.3 provide an overview of the gender issues
in structural adjustment in LAC plus women's and men's relative position in the region's labor
market. This sets the stage for the in-depth discussions that follow in Section 4.

Section 4 reviews the literature on selected gender issues related to employment and the T&I
initiative. This section also explores how consideration of gender may enhance the long term success
of T&I initiatives. Discussion is limited to women and men already in the labor force, since the
determinants of women's decision to join the labor force (e.g., education, age, marital status, and
household headship) are well-known and fairly well understood.' Similarly, we have not included
the voluminous literature arguing for or against women's employment in export-oriented production
and/or examining the effects of industrialization in general on women's status.3 Instead, three types
of gender-based discrimination pertinent to T&I are explored, followed by a summary of gender
issues arising in unionization, the informal sector and outwork, occupational safety and health, and
protective legislation.

The fifth and final section highlights gaps in our knowledge of gender and T&I issues.
presenting them as research recommendations. While many of these recommendations flow directly
from the analysis ia ihe body of the report, others derive from suggestions and comments made by
reviewers. Still others emerge from the juxtaposition of the literature review with LAC programs and
policy initiatives. Whenever relevant, research recommendations are directly linked with the LAC
Bureau's programmatic interests. These recommendations and/or the key supporting arguments in
Sections 3 and 4 are in bold print for emphasis. The reader is referred to the glossary at the back of
the paper for clarification of unfamiliar terms.










2. THE LAC BUREAU'S TRADE AND INVESTMENT NITIAT 'E


Most Latin American countries in the 1980s have embarked on structural reforms. especially in the trade
sector. But the scope and depOL of these efforts have differed widely ... hat is required in mos:
Latin American countries is to remove impediments to growth, to ensure the efjfcient functioning of
markets and to strengthen the prospectsfor a healthy improvement in the supply potential of these
economies. Measures should aim at reducing over-reguiation and at removing the excessive protection of
favoured sectors and widespread reliance on subsidies: and they should include the liberalisaton of
regulations for investment flaws. Ajier the public sector has stopped crowding out the private sector,
financial markets should be deregulated and financial institutions exposed :o competition. More flexible
labour markets and less restrictive labour codes are essential to avoid friction costs arising from the
reallocation of real resources in the course of structural adjustment and ti atract foreign capital (Fischer
1991:23).

A.ILD.'s current strategy for development in Latin America largely parallels Fischer's
recommendations. The strategy is guided by President Bush's vision of "free governments and free
markets" in the region. The LAC Bureau promotes broad-based and sustainable economic growth by
encouraging policies 'conducive to the development of market oriented and globally competitive
private sectors" (A.I.D. 1990a:1). Such policies aim to provide two-way benefits, such that U.S.
businesses benefit from more open markets and investment opportunities overseas at the same time
that LAC businesses and countries benefit from increased trade opportunities and investment flows
plus corresponding increases in export earnings and employment, among other things.

During the 1980s, the Agency generally was successful in integrating private sector concerns
into its development activities. Now, the focus has shifted to the next logical step promoting trade
and investment. Box 1 provides an overview of some of the arguments put forth by economists for
these and other aspects of the rationale behind the shift to an emphasis on T&I.

Agency efforts to support T&I development during the last decade generally encompassed a
number of activities, all of which were present to some degree in LAC programs. These activities
can be grouped into six categories, as follows (Ernst & Young 1989:11-36).

1. Policy dialogue to improve the climate for T&I activities and ultimately increase export
earnings via, e.g., support for new legislation and for research and demonstration projects.

2. Foreign investment attraction via information services to foreign firms.

3. Joint-venture/matchmaking programs, to foster firm-to-firm linkages and match local with
foreign partners.

4. Export development programs, including institution building, to develop expor. capability in
the host country or region by supplying market information, identifying distributors and new
market channels, providing trading services, defraying trade show participation costs, and
strengthening local productive capacity.

5. Infrastructure development to enhance human and physical resources so as to attract foreign
investment or improve export capability, via entrepreneurial training or capital improvement
projects.









The recent emphasis or trade and investment promotion as interpreted by A.I.D. finds considerable support in the
mainstream literature c.n development economics. Trade based on comparative advantage is rooted in Ricardo's
theory of comparative advantage, dating back to the early 1800s.' Technology transfer has been supported since
the pioneering days of development economics in the 1950s, based on the neoclassical view that sustained growth
is possible only through exogenous technological change (Solow 1957).

Theoretical modeling lends support to the importance of trade, investment, and R&D in encouraging economic
growth. A 1990 study in the American Economic Review demonstrates that a correlation exists between the
implementation of policies based on comparative advantage and long-run growth in the international economy. The
study employed a dynamic, two-country model of trade and growth to explore how the external trading environment
helps determine long-run growth rates. The model was applied to a hypothetical situation wherein one nation has
a comparative advantage in manufacturing and the other in R&D. Results indicated that, if trade barriers in the
country with a comparative advantage in R&D (the U.S.) encourage the purchase of domestically produced
manufactures over imports (say, from Mexico), they will depress long-run growth rates in the country with the
advantage in R&D. Conversely, when policies to subsidize R&D at equal -ates in both nations are introduced into
the model, growth accelerates in both. These results suggest that protectionist policies hurt both sides, wh-reas
reasonably free trade based on comparative advantage and the development of productive capacity will promote
growth for both (Grossman and Helpman 1990; see also Corden 1990, Ranis and Fei 1988, and Salvatore and
Hatcher 1991).

For developing countries, economists have explored trade and employment links most frequently in the context of
North-South trade. For example, the functioning of the labor market, and particularly wage policies, is cited by
Fields as "a causal factor determining the success or failure of export-led growth" (1984:81; see also Lambson
1992). Bacha (1978) models the interactions between technological change, income distribution and employment
in develc-ing countries, including the effects of productivity improvements on the terms of trade and, subsequently,
employrr.int levels. Additionally, the importance of trade in encouraging growth has been thoroughly debated in
the literature over the years. Deepak Lal cautions that "trade by itself can rarely be the major determinant of
growth; int rnal factors are more important in explaining the wealth of nations" (1985:48) Nevertheless, he notes
that trade is in many instances a necessary condition for growth. Arthur Lewis emphasizes the importance of
investment levels to economic development, pointing out that they are "highly correlated with growth and may
serve as a proxy for the forces propelling the economy" (1984:7). Trade and investment may not be universally
welcomed by all segments of society, however; some may view them as potentially damaging in environmental and
social terms.

In fact, in the early stages -f U.S. industrialization (1880-1940), trade based on comparative advantage involved
the substantial depletion of natural resources, as well as the application of superior technology. An examination
of American industrial success found that "the single most robust characteristic of America. manufacturing exports
was intensity in nonreproducible natural resources" (Wright 1990:651). A.I.D.'s focus o nontraditional exports
in Latin America is in keeping with the concern for natural resource depletion and efforts :o raise income streams
by increasing the value added to export goods (Table 1, Annex A). The T&I initiative, while responsive to
environmental concerns, also appears to recognize the need for prudent use of natural resources to fuel a country's
industrial and, by extension, socioeconomic development.


For the A.I.D. of the 1990s, the over-arching goal is long term growth. However, another high-profile goal is
employment creation, primarily because of the visible human toll of the 1980s' debt crisis and stru-tural adjustment
programs. Also, A.I.D. continues to support the social safety-net programs instituted in the late I "80s to alleviate
the tremendous suffering engendered by Latin America's economic crisis. These expenditures a-e justified and
largely encouraged by economists as investments in human capital (Lewis 1984). Wh.:e the T.& initiative is
designed primarily to increase growth, export earnings, and jobs, in some cases, increased governu.-ent revenues
frcm the program also will finance social spending, and so sustain services to alleviate poverty-related suffering
during the development process.










6. Credit programs to provide assistance to small- and medium-sized export-oriented enterprises
via low-interest loans and assistance with loan applications.

The present overview of the T&I literature deals directly or indirectly with (1) policy
dialogue, (4) export development programs, and (5) infrastructure development in relation to gender.
Gender concerns for the information services embodied in categories (2) and (3) can be directly
addressed by, e.g., giving preferential treatment to firms :hat have gender-balanced work forces,
making special efforts to include women-owned businesses in matchmaking programs, and providing
information about wage rates and labor supply on a gender-disaggregated basis to foreign firms,
especially in those sectors where single-sex work forces predominate. Additionally, indirect impacts
of such programs on employment are implicit in the discussion throughout. Credit (6) is not
addressed in the present report because the literature on credit and gender is so well-known and
extensive that to review it here would be superfluous.

2.1 LAC Bureau Activities

Currently, the LAC Bureau's efforts are focused on technical assistance to support the
removal of constraints to trade and investment in the region. A description of the Bureau's activities
follows (A.I.D. 1992).

The Office of Trade and Investment for the Latin America and the Caribbean Bureau
(LAC/TI) manages several projects and coordinates with other offices within A.I.D.
to provide short-term technical assistance to field missions with respect to improving
the enabling environment for trade and investment in LAC countries. This assistance
can be directed specifically to help countries meet world class standards in such areas
as the regulatory, legal and judicial environment, including intellectual property
rights, anti-trust and trade remedies. LAC/TI is developing a mechanism that would
provide limited funding (travel and per diem) for experts from the U.S. Government
agencies in order to address these problems where a country has requested U.S.
Government technical assistance. L4C/TI is developing a mechanism which would
allow host countries to provide matching funds to defray costs of technical assistance.
it would demonstrate the host country commmittment to reform in these critical areas
and not rely exclusively on A.I.D. Finally, LAC/TI has an agreement with the
Department of Commerce (DOC) which can target limited technical assistance for
business development activities based on mutual agreement by A.I.D. and DOC.

2.2 LAC Mission Activities

Mission strategies and programs vary according to the general level of development in the
country, the extent to which the markets are functioning freely, the state of the financial system, the
regulatory and legislative environment, and a variety of related factors ranging from the political
leanings of the government to the educational level of the labor force. The majority of Latin
American governments have now been convinced of the need for open markets and free trade.
Currently, they are primarily interested in receiving donor assistance to implement the necessary
reforms while avoiding excessive social unrest during the transition period. Consequently, LAC
Mission technical assistance activities "focus heavily on improving the economic policy environment
and removing critical constraints to trade and investment" (A.I.D. 1992).










Policy and Non-Policy Constraints to T&I. Both policy and non-policy constraints to T&I
program success abound in many LAC countries, including, e.g., regulatory barriers to intraregional
trade, excessive tariffs on some imports, strict labor regulations, and impediments to joint ventures,
foreign investment, and, in some countries, repatriation of profits. A typical example is
USAID/Ecuador. There. the Mission's policy dialogue strategy for T&I includes substantial efforts to
modify the bureaucratic and legal framework restricting the free flow of trade and investment. The
following areas are targeted for reform.

Licensing requirements for imports and exports.

Regulatory barriers to intraregional trade.

Discrepancies between regulations governing investment in domestic versus foreign or mixed
enterprises.

Excessive number of state-owned enterprises.

Strict labor codes that encourage the proliferation of exempted small- and medium-sized
enterprises.

Distortions in fiscal and financial incentives favoring the excessive use of capital over labor.

Inefficiencies in the transportation system, including subsidies to state-owned companies.

Tariff and non-tariff barriers to domestically produced exports, including those imposed by
the U.S.

Non-policy constraints to the successful transition to open markets and free trade in LAC
countries may include poor infrastructure, poor market information and weak linkages between
economic sectors, lack of technology development and technology transfer systems, and
underdeveloped financial markets (A.I.D. 1991). Again, USAID/Ecuador offers a good example of
how one Mission is structuring its T&I program. Its T&I activities are organized under five
categories.

* Policy dialogue.

* Development and diversification of domestic production and services.

* Trade and investment promotion and market development.

* Capital-building to support program objectives.

a Institution building.


Export Promotion. The mix of policy and non-policy constraints addressed by A.I.D.
naturally varies somewhat across countries. However, a common component is a focus on export
promotion, including support for policy dialogue and technical assistance. Recent studies have










explored implementation aspects of export promotion as part of the broader T&I initiative. These
studies have examined "public versus private intermediaries, the interaction of policy reform with
export promotion and supply versus demand side interventions" (A.I.D. 1990b:2). Related project
activities range from collecting international marketing data and conducting policy dialogue, surveys,
and studies on export promotion, to providing demand- and supply-side technical assistance.

Demand- and Supply-Side Technical Assistance. An example of the last of these is
PROEXAG (Non-Traditional Agricultural Export Support Project), a regional project in Central
America. Supply-side technical assistance through PROEXAG involves production technology,
extension, and packaging and labeling. The goal is to overcome export problems such as insufficient
supply of goods, inappropriate or substandard packaging for the target markets, and non-adherence to
other quality-control standards. Demand-side technical assistance provides marketing information to
new exporters, promotes interaction between local associations and overseas buyers, and furnishes
training and information on the recipient country's regulations and expectations about the products to
be exported ibidd).

Export Processing Zones (EPZs). In the 1980s. a common component of export promotion
strategies, particularly in the Caribbean and Central America, was the use of demonstration models of
EPZs. The assumption was that "EPZs require few initial policy changes, provide numerous jobs and
generate immediate exports" (ibid:2). Later, policy reform was encouraged to facilitate broader
participation in export-related activities on the part of both foreign and domestic entrepreneurs by
eliminating or reducing constraints such as "overvalued exchange rates, bureaucratic customs delays,
inefficient public utilities, import licensing constraints, and inadequate skills in the labor force" ibidd).
However, under new guidance from the U.S. Congress, A.I.D. will no longer provide support for the
development of EPZs in the region. (n.b. The present review contains some references to gender
issues in EPZs and free trade zones, since it was prepared prior to the new legislation. Although not
directly relevant to A.I.D.'s work, the discussion has been left in the text as a point of information
for non-A.I.D. readers.)

Promotional Institutions. Support for promotional institutions is also being phased out. In
the 1980s, a number of LAC Missions supported institutions that provide "information, for example.
on the market in target countries and contact names," and that make a "modest but important
contribution to building nontraditional exports" (Robert Nathan Associates and Louis Berger
International 1990:3). For example, the Guild of Nontraditional Exporters in Guatemala and the
Council for Agribusiness Cooperation and Co-investment in the Dominican Republic provide export
promotion services ranging from trade shows and buyer contacts to market information, technical
assistance and training.

2.3 Summary

As discussed above, A.I.D. is supporting LAC governments in the removal of constraints to
T&I in the region. One of the outcomes of these efforts is expected to be employment creation. Tnis
outcome, in particular, has gender-differentiated implications that should be monitored by the
Missions. One of the areas to monitor closely is the gender composition of the work force.
Particularly in growth industries, this composition can change during a period of T&I promotion, in
response to international marketing pressures (e.g. an emphasis on cost), regulatory reforms (e.g.
changes in labor legislation), or other factors. Conversely, it may be stagnant in the face of these
changes, suggesting the presence of gender discrimination, institutional barriers to the free flow of










labor (e.g. "closed shop" union policies), or the presence of a large informal sector. These are issues
that the LAC Bureau needs to be aware of in order to ensure the long-run success of the T&I
initiative, from the perspective of people in the work force as both inputs to and beneficiaries of the
development process.








3. AN OVERVIEW OF THE LITERATURE RELATED TO GENDER AND T&I

Now, what does the gender literature to date offer in the way of guidance for A.I.D.'s T&I
programs and some of the issues outlined in the preceding section? This section and the next tackle
this question.

For LAC, the bulk of research specific to gender concerns in T&I-related topics consists of
anthropological and sociological case studies and surveys of women's roles. These investigations
offer largely qualitative information on topics such as: women's participation in manufacturing and
export-oriented agribusiness, reasons for women's increasing participation in the formal-sector labor
force, and constraints to employment faced by women. The reliance on qualitative information or, in
the case of quantitative data, small sample sizes, reflects the tremendous lack of national-level,
empirical data disaggregated by gender. Moreover, much of this work is "output oriented" in that it
examines gender from the perspective of how development differentially affects women and men.
In contrast, economists studying such issues as those outlined above frequently analyze gender
in terms of the labor market. They discuss, e.g., labor supply and demand, labor force participation,
displacement effects of freer markets and industrialization, household and market interactions, and
labor-market segmentation and discrimination. Much of this work can be characterized as "input
oriented." as the focus frequently is on how women and men differentially affect development.

The complementarity of these two perspectives is important for A.I.D. in the context of
monitoring and evaluation and quantifying and reporting on females' and males' respective share of
development benefits, plus indirect as well as direct effects on development of both groups. Yet
neither an output nor an input analysis alore can satisfactorily provide the needed data; nor can
unidisciplinary approaches.

In any case, the T&I-specific literature does not often explicitly deal with gender issues. At
most, T&I studies may note differences in the gender composition of the labor force and perhaps
briefly discuss why these differences arise. Conceptually, this general inattention to gender is in part
understandable as an epiphenomenon of T&I's focus to date on macroeconomic processes and
indicators such as investment levels, export earnings, tariff reductions, and so on. Indicators that try
to evaluate the impact of changes in T&I on the population are often overlooked; and the measures
that are used leave little room for people-level concerns (whether female or male people). The most
common example of a people-level indicator related to T&I is employment creation. Yet in fact.
people-level, and therefore also gender, concerns are very relevant people of all sorts are
producers, consumers of marketed goods, and users of the natural resources upon which the
production and consumption of traded goods perforce depend.

3.1 A Framework for Identifying and Analyzing Gender Issues in T&I

At the risk of over-simplifying, two key player groups can be used for the purposes of gender
analysis within T&I: entrepreneurs and non-entrepreneurs. Taki-g Ahis distinction as a departure
point, gender concerns can be usefully identified and analyzed within the framework presented in Box
2. With the basic interests laid out in Box 2 in mind, Sections 3 and 4 present a summary analysis of
what the LAC development literature tells us regarding gender, trade and investment, and
employment, starting with an overview of structural adjustment and labor force participation rates to
set the stage for Section 4.








BOX 2: A Framework for Identifying and Analyzing Gender Issues in T&I

Foreign and domestic entrepreneurs have an interest in:

Present and future conditions of local labor markets (e.g., supply of qualified labor, factors
affecting that supply)

Present and future conditions of local product markets (e.g., demand for products/services,
identification of their competitors in both domestic and export markets)

Local legislation, government policies, standards, and regulations and their degree of
enforcement that affect the labor market (e.g., minimum wages, health and safety regulations)

* Local legislation and government policies concerning foreign investment, earnings, and
reinvestment of profits (this also will affect employment creation and job stability)

Environmental protection legislation and regulations and their enforcement (e.g., pollution control
requirements, long term supply of and access to natural resources as inputs to production)

Non-entrepreneurial organizations and individuals such as host country governments and citizens have
an interest in:

Employment opportunities and work conditions offered via domestic and foreign investment.
including occupational health and safety conditions

* The effects on jobs and on the local economy of opening up domestic markets to international
trade and increased competition (i.e.. who are the winners and losers, by class, gender, ethnicity.
race, age)

* Househoi and family-level impacts of social and economic change

* Tax revenues from international trade, foreign investment, and increased local production, and
use of those revenues for social or human capital investments

* Technology imports that increase efficiency and long-run growth but have potential short-run
substitution effects for labor (e.g., computers reduce the number of secretaries and bookkeepers;
industrial technology can introduce labor-saving techniques but may not be the most cost-effectiva
choice where local wages are low and/or unemployment, underemployment, and population
growth rates are high.)

* Environmental degradation and associated quality-of-life issues linked with accelerated rates of
production and development

* The balance between the long-run benefits of growth and the short- and medium-run costs of
industrialization (e.g., is a Western-style industrial society appropriate for a given
country/culture? Is it socially desirable to limit labor-saving technology imports? At what point
is employment more important than profits or growth rates, especially in light of income
distribution considerations? Are women more likely than men to suffer negative consequences
from the introduction of a new technology?)










3.2 Gender and Structural Adjustment in the 1980s


The literature on gender and structural adjustment (SA) offers some of the most systematic
and innovative attempts to date to apply economic analysis to gender-and-development issues. An
example is the use of labor market models to analyze gender within the context of SA (e.g. Addison
and Demery 1987, 1989; Collier 1989, 1990). More recently, A.I.D.'s Office of Women in
Development conducted a series of case studies on gender and SA to examine economic and social
patterns, employment, wages and growth, and the social costs of adjustment in terms of human capital
(MayaTech 1991; the studies covered COte d'Ivoire, Ghana, Jamaica, and Pakistan). The resulting
report is noteworthy for its attention to both sides of the gender analysis equation: i.e. how gender
affects adjustment, and how adjustment affects gender. The report also provides a good summary of
recent attempts to link macro-level policies with micro-level outcomes in the context of gender
concerns in-development. This report is just one example of a large body of 1980s literature on the
effects of SA and recession on women relative to men.5

One of the most notable SA problems in the LAC region was that "governments carried out
programs of sweeping economic change, but . essential social structures remained unaltered"
(Bonilla 1990a:3). Underprivileged populations including the overwhelming majority of women
(and children) bore the brunt of the economic reform policies that reduced social services, cut
public-sector employment, increased unemployment generally, and tightened credit. As a number of
studies point out, SA generally hits women harder than men because of longstanding gender inequities
in the labor market and in society as a whole. Gender differences in labor mobility and work
force participation, for example, are critical in explaining differential responses by women and
men to SA and economic crisis (Collier 1989, 1990). The SA process amplifies pre-existing gender
gaps in health, education, employment opportunities, and nutrition in developing countries (MayaTech
1991:6)." Research has shown that two stabilization policies in particular public expenditure cuts
and devaluation have significant adverse effects on women (Deere et al. 1990, Joekes 1991).

Gender Impacts of Cuts in Public Expenditures. Reductions in LAC government spending
during the 1980s entailed cuts in important social services and entitlements including, e.g., free health
care and education, housing programs, and utilities and food subsidies. With reduced subsidies,
prices of basic goods increase, including fuel and food. Women's traditional household and
community roles and their disproportionate representation among the poor in LAC mean that women
often suffer the most from reduced government spending on social services, since they are responsible
for basic domestic needs such as food preparation, general maintenance of the domicile, family health
zare, and both child and elder care. To save money during tough adjustment periods, women may
purchase food with lower nutritional value or choose cheaper, less processed goods that require more
preparation than before, thus robbing time from women's income-generating activities (Joekes 1991).
To save both time and fuel costs, women may omit one of the daily cooked meals. Or they may cook
bulk quantities of food to be eaten cold across several days, with undesirable outcomes for food
quality and sanitation. As a result of such cost-cutting measures in the household, children may
suffer from poor nutrition during economic adjustment periods. In addition, children's (especially
girls') school attendance may drop, as they are forced into wage work to supplement household
income, or as they take over domestic chores so that the mother can earn income outside the home.

With respect to the employment effects of government spending cuts, women are adversely
affected because as workers they are heavily concentrated in the public and service sectors. Budget
cuts mean layoffs, fewer new jobs and/or lower wages in the public sector. Moreover, women face a










double squeeze in such circumstances. In the public sector, "women's jobs" are often considered
more expendable; and the skills that women may have acquired by virtue of their employment in the
public sector may not be easily transferable to available jobs in other sectors ibidd). Furthermore, the
public sector actively employs women in services, and in state-owned agricultural and industrial
enterprises; thus SA-induced moves toward privatization put women's jobs on the line in those
sectors.

Gender Impacts of Currency Devaluation. Initially, devaluation may decrease profits in the
service sector, causing women the majority of employees in this sector in LAC to lose their jobs
or take a cut in real pay ibidd). Empirical evidence from the region indicates that, during SA,
unemployment rates often are significantly higher for females than males. For example, in 1985
Jamaican women faced unemployment rates of nearly 37% twice as high as those for men.
Devaluation also increases the cost of living, particularly in import-dependent countries such as those
of the Caribbean (Deere et al. 1990). Women, who generally have lower incomes than men, more
frequently find their incomes becoming marginal under these circumstances.

Special Problems for Female-Headed Households. At the micro level, SA particularly
imperils female-headed households, who may depend on one adult income for survival. Characterized
by the lack of access to resources, low nutritional status, and a high incidence of poverty, such
households average a higher ratio of dependents to providers than do their male-headed counterparts.
LAC has the highest percentage of female-headed households in the developing world. Estimates
currently range from 25% to 33%, and the figure appears to be increasing. Statistics from the early
1980s indicate that female-headed households are more prevalent in the Caribbean (31%) than in
Central (16%) or South America (20%) (Folbre 1991). Research shows that, during periods of
economic crisis, these households are particularly disadvantaged in their efforts to provide for basic
needs.

3.3 Gender and the Labor Force

Labor force participation (LFP) rates sometimes referred to as "economic activity rates" -
reflect the number of women and men of working age who are participating in the labor force. This
statistic is designed to compare the proportion of the reference group actively participating in the
labor force to the total number of persons in the group eligible to work. In the case of women's
participation rates, the LFP rate is the ratio of all women in the labor force (including those actively
looking for work) divided by all women in the population over the age of 15. A given group's share
of the labor force (LFS) is the number of group members currently employed as a percentage of all
employees in the work force. Analysis of LFP and LFS rates can provide valuable information to
employers, investors and development organizations about the current supply of labor and
expected future conditions. (See Box 3)

The literature of the last 10 to 15 years has paid considerable attention to the determinants and
rates of women's LFP at an aggregate level. There are, however, large gaps in the availability of
gender-disaggregated data at the subsector level (2-3 digit ISIC codess, in part because most surveys
of LAC industry do not collect employment information by sex. Nevertheless, household-level
employment surveys frequently do record the sex of all working-age members, even though
government agencies may not tabulate and report it on a gender-disaggregated basis.' While these
household surveys pose problems with respect to coverage and comparison with industrial surveys,
they currently provide the best proxy available for empirically estimating gender-disaggregated LFP.






I T


BOX 3: Measuring the Employment Impacts of A.I.D.'s T&I Programs on Women and Men

An outward oriented trade policy may be particularly beneficial to women by increasing labor market
opportunities in which women workers are preferred by employers, on the basis of their willingness to
work for lower wages than men, other gender specific characteristics, or tradition. In particular, a focus
on export production in some developing countries appears to increase women's employment in certain
subsectors of the economy (e.g., textiles, clothing and electronics). Wood (1991) examined the nexus
between female intensity in the manufacturing sector and export performance from both a dynamic and
a static perspective. For developing countries, she found that those "which exported a rising proportion
of their manufactured output to the North tended to employ a rising proportion of women in their
manufacturing sectors," and those "with export oriented manufacturing sectors tended to have female
intensive manufacturing sectors" (1991:171).

Estimates of the relationship between female intensity and export performance for all developing countries
imply that "a 10 percentage point increase in the ratio of North bound manufactured exports to
manufacturing value added is associated on average with an increase of between 3-4 percentage points
in the share of women in the manufacturing labor force" (Wood 1991:175). Wood suggests that, while
one might have expected a larger increase in female intensity from an increase in export performance,
given the concentration of the South's manufactures in female intensive sectors, the low estimates may
be due in part to strong growth in male intensive sectors (steel, ships and autos). The regressions have
not been run specifically for the LAC region, where women do form a large share of the export oriented
labor force in certain countries. Although it is still early in the process to draw conclusions about
employment effects, this relatively easy analysis might provide some insight into the degree to which
women compared to men might be expected to contribute to and benefit from an export oriental: -n.

This work has implications for A.I.D.'s indicator exercises. In her attempt to measure the impact of
trade on women workers, Wood used the ratio of the increase in female employment in the manufacturing
sector compared to non-traded sectors as a relative measure of female intensity in the work force. Ideally,
this measure would be used in cross country comparisons to control for variation in the absolute levels
of employment increases across countries. The author found that the ratio is not valid as a measure for
developing countries, for a number of reasons: (1) changes in female intensity in non-traded sectors
probably reflect sector specific rather than economy wide influences; (2) the nature of the non-tradeables
sector changes dramatically during development; ane (3) employment is often poorly measured in non-
traded sectors (Wood 1991).

When evaluating the employment effects of T&I programs, therefore, it may not be sufficient to compare
increases in female employment levels in the manufacturing sector with increases in non-traded sectors,
and designate the difference as due to the effect of increased trade. In fact, for the LAC region, studies
indicate that substantial amounts of female employment generated by trade may be reflected in non-traded
sectors and the informal sector instead, as a result of subcontracting and extensive linkages between the
formal and informal sectors in L.C economies (Bourque and Warren 1991). Alberti suggests that
outwork may partially explain "the apparent lack of growth [in Central America] of the industrial sector
as reflected in census data despite select indicators to the contrary" (1989:9). A better measure of the
employ-ient effects of trade, particularly for women, should reflect both manufacturing and, at a
minimum, some portion of non-traded sector employment gains. The specification of this indicator will
require further investigation to determine the appropriate way to capture the full effect and shed light on
the differential effects of trade on men's compared to women's employment.


7 I


-I h L I I









Such survey data exist for a number of LAC countries, including Brazil, Costa Rica, Ecuador, El
Salvador, Guatemala, Nicaragua, and Panama.10 For the present, however, a full, accurate analysis
of LFP by gender across countries is virtually impossible.

LFP Rates. Despite these and other obstacles to reporting women's LFP accurately," the
available figures do display some general trends. The average LFP rate for women is 27% in South
America and Mexico, 25% in Central America,' and 47% in the Caribbean. For men, these rates
are 80%, 84% and 77%, respectively (UN 1991). For women in their most active years (age 20-59),
however, average rate climbs 6 points in South America/Mexico to 33% (Psacharopoulos and
Tzannatos 1992:3). (Readers should consult Tables 2 and 3, Annex A; country by country rates are
presented in Table 2, Annex B.)

In all but three of the 29 countries for which data are available between 1970 and 1990, the
rate at which women joined the labor force (the growth in their LFP rate) was higher than the rate for
men. This finding reflects a number of factors, including:

the severity of the drop in real household incomes during the 1980s, forcing women into the
work force;
falling LFP rates overall for men, due to lower participation rates for young and old men;
greater numbers of girls completing formal schooling and entering the labor force, in response
to governments' and development organizations' emphasis on education; and
greater availability of public sector employment which has traditionally offered women
more equitable access to ;,bs than the private sector as governments expanded in the early
1970s.

These factors, however, were partially overpowered by the negative employment effects of the
economic setbacks of the 1980s. Subsequently, "the [reported] pace of women's entry into the work
force has slowed down since 1980 and the increase was only around 0.6% in 1990" (Bonilla
1990b:221). The UN finds that "growth in the female labor force has been undercut by economic
recession. Women generally continue to be the last to benefit from job expansion and the first to
suffer from job contraction particularly in the stagnant or declining economies of Africa and Latin
America" (1991:83).

LFS Rates. Women's share of the labor force averaged around 26% in LAC in 1990, and is
expected to climb to 27.5% by the year 2000 (Bonilla 1990b). In 1990, women represented 26% of
the total work force in South America and Mexico, 23% in Central America, and 37% in the
Caribbean (Table 4, Annex A). While women's LFS is similar in Central America and South
America/Mexico, the Caribbean shows a substantially higher figure. But the Caribbean also displays
the greatest variation between countries. There, women's LFS runs from a high of 46% in Jamaica
to a low of 15% in the Dominican Republic. The latter is the lowest figure reported in the entire
Latin American and Caribbean region.

Unemployment Rates and Share of Unemployment. Given the emphasis on employment
creation in T&I programs, unemployment statistics provide one way of measuring aggregate impact
over time. Table 5 in Annex A summarizes unemployment rates and the share of unemployment by
gender for the mid-1980s. For women and men, respectively, rates were 9% and 8% in South
America and Mexico; 10% and 6% in Central America; and 26% and 16% in the Caribbean.
Women's share of the unemployed (i.e., the proportion of women in the unemployed population at a
given time) averaged 31% in Central America, 40% in South America and Mexico, and 53% in the










Caribbean. At the subsector level, evidence from Ecuador provides some further insight into
women's unemployment. In the manufacturing sector, for example, surveys show that the average
annual unemployment rate for urban women between 1987 and 1990 was more than double that for
men 6.97% versus 3.21%. In addition, while women in Ecuador's manufacturing sector during
this period represented 32% of the labor force, they constituted more than 40% of the unemployed
persons (Mauro and Orriola 1992). Due to survey design problems and other biases, official
unemployment statistics often do not accurately reflect women's and men's entrance into the informal
sector, where many people found employment during the recession (Table 10, Annex A). When
these individuals, sometimes referred to as the "underemployed," are included in the analysis, the lack
of suitable employment approaches crisis proportions.

In.some cases, high rates of female unemployment may influence government policies in
favor of some forms of foreign investment. According to one study of the Caribbean, "Despite the
many problems associated with creating [EPZ] employment, governments in the region find it a ready
palliative for the high levels of female unemployment" (Massiah 1990:227). Although
industrialization in the Caribbean initially was promoted during the 1950s as a way of "providing
productive employment for the surplus labor, including women," in fact it has had mixed results for
women's unemployment rates and the male-female gap (Massiah 1990:226). As shown in Table 5,
Annex A, women's unemployment rates in the Caribbean averaged around 26% in the mid-1980s,
compared to an average of 16% for men. More telling, perhaps, is the observation that in several
Caribbean countries during this period, approximately 60% of the unemployed persons were female.

In sum, a major issue for those involved in T&I promotion will be to determine the degree to
which those programs and policies contribute to and benefit from the incorporation of women as full,
permanent members of the labor force. Particularly in countries where there is a large gap in
unemployment/underemployment rates between women and men, as in much of the Caribbean,
activities geared toward increasing employment may need to consider what factors are behind these
gaps. For example, are women workers being utilized primarily as a reserve labor force hired
during periods of high production to provide the flexibility necessary to compete in large,
international markets or as a source of cheap, unskilled labor that will be squeezed out as wages
rise and attract more male employees? Currently, little research is available to document the effects
over time of the introduction of an outward orientation on the female versus male labor force in LAC
(recall Box 3). When the EPZs were relatively new in the !970s and early 1980s in the Caribbean,
for example, volumes of research studies were published questioning the quality and benefits of EPZ
employment for female employees. Now that some of these zones have matured, researchers are
beginning to ask dynamic questions that need answers: what happens to those workers who leave
EPZ employment? do they find comparable, better or worse jobs in the domestic economy? of those
workers who remain, do they receive additional training and promotions as the industry process
changes or remain in low-skill or entry-level jobs? A further question arises when the analysis of
employment effects is extended across class, race or other socioeconomic variables. Are certain
groups of women (or men) more susceptible to unemployment/underemployment? what places them at
greater risk? how will T&I promotion affect their short- and long-run prospects? and what types of
programs can be built into T&I activities that will improve their prospects?

The sustainability of the positive employment effects of T&I will depend in part on the
answers to these questions. In the next section, several specific factors which may limit LAC
women's and/or men's abilities to participate fully and permanently in a more vigorous labor market
are discussed all of them have implications for how the labor force will respond to and be affected
by T&I initiatives.










4. T&I IN RELATION TO EMPLOYMENT AND GENDER


This section explores three types of gender-based discrimination pertinent to T&I: sectoral
segregation, occupational segregation, and wage discrimination. In addition, gender issues arising in
four topical areas relevant to T&I are reviewed: unionization, the informal sector and outwork,
occupational safety and health, and protective legislation.

4.1 Sectoral Distribution of Labor by Gender

Women are frequently and traditionally discriminated against in the formal sector in LAC,
most obviously by their concentration in certain sectors of the economy. For example, women are
predominately employed in the service sector, noted for its flexibility as well as its insecurity. In
1980, 65% of all economically active women in LAC worked in services, compared to 37% of men
(Bonilla 1990b). Men are more evenly distributed across sectors, with about a third of all
economically active males employed in each of the three major sectors (Table 6, Annex A). More
recent trends in gender distribution by sector are suggested by survey data frnm Central American
households of the mid-1980s. These data show: a decline in women's employment in the service
sector and a rise in men's: slight increases in both sexes' employment in industry; and a rise in (or
better reporting of) women's participation in agriculture along with a decrease in men's (compare
Tables 6 and 7, Annex A).

Population censuses and household employment surveys offer some further perspectives on
gender distribution, particularly by subsector. An example is the manufacturing sector in Colombia
and Ecuador. In Colombia, women employees predominate in the clothing industry (81% of all
workers); and they constitute approximately a third of the work force in food (30%), textiles (35%),
printing/publishing (31%). chemicals (42%), and electrical machinery (28%) (UN 1989). In Ecuador,
women comprise 60% of the work force in textiles, 30% in printing/
publishing, 30% in chemicals, and 35% in food, drinks, and tobacco (Mauro and Orriola 1992).

Gender distributions of labor can vary across subsectors by geographic regions within a
country, as well as by whether firms are producing primarily for export or domestic markets. For
example, a rapid rural appraisal of Ecuador's export sectors found a high concentration of women in
several sectors, but with variations between the culturally distinct sierra and coastal zones (Blumberg
1992). In the sierra, women generally constitute over 60% of the work force in export-oriented
flower firms and in fruit and vegetable processing; on the coast, they account for approximately 75%
to 90% of employees in most firms involved in fishing and shrimping on the coast. In industry,
women average 57% and 42% of the work force in ceramics and leather firms, respectively, and 95%
of the work force in the sierran clothing maquilas (factories or plants producing exclusively or
primarily for export, often under contract to a foreign firm)." Similarly, in Costa Rican EPZs
women constitute 82% of the work force; of the firms surveyed, 75% manufactured textiles and/or
clothing (Hermosilla 1987). In this sample, 68% of the managers interviewed indicated a preference
for female workers. Managers observed that women tolerated repetitive tasks better and, more
importantly, that women would work for wages 30% to 37% lower than men's.

These sorts of sectoral or subsectoral distributions of employment by gender can be an
important indicator of women's and men's relative stake in and potential benefits from increased
T&I in those sectors (see Table 8, Annex A)." The preponderance of one sex in a given sector or
subsector may relate to the labor intensity of production, wage levels, working conditions, simple

16









discrimination, and/or cultural factors specific to the sector. Such gender distributions, however, are
not static;" they can be affected by activities related to T&I promotion, such as increased access
to international markets for a product or suspension of labor market regulations (e.g., iob
security, wage indexing, social security/health care payments, maximum hours/work week, maternity
benefits; see Section 4.7). For example, low wages in a highly competitive, export-oriented sector or
exemption from job security legislation for firms in EPZs may swing the gender distribution of the
work force in favor of women in a given situation, as they have fewer alternatives for employment
than do men. Box 4 displays four factors that researchers have found important in explaining sectoral
distributions of labor by gender in developing countries.


BOX 4: Factors Explaining Sectoral Distributions of Labor by Gender'6

Asymmetric rights and obligations within the household exclude women from certain types
of jobs. The extra hours that women spend on household chores and child care limit their
employment opportunities in the formal sector. "The unequal distribution of labor in the home,
rather than women's lesser ability to perform other types of work...is te main ,jstacle to
equality" (Blau and Ferber 1986:35).

The burden of child beari g wid rearing, in particular, limits women's participation in
the formal labor market, as well as the type of jobs they seek. Child care (and elder care) duties
place heavy demands on women's health, energy, and time. Women are thus often obliged to
take jobs that offer more flexibility, but few other benefits. Although Latin American women
are lately bearing fewer children, time allocation studies and time-use indicators show that women
are still responsible for the majority of child care and household work.

Outdated role models in the household perpetuate employment patterns of gender
subordination. "Women are traditionally seen first as wives and mothers, any other activity
performed is viewed as 'complementary' to these primary roles, in spite of the importance it may
have for the survival of her [sic] family" (Bonilla 1990a:4). These stereotypes persist in part due
to the lack of reliable statistics to show how LAC women's position has in fact changed relative
to men's in recent years, particularly in terms of labor force participation.

Extra-household discrimination in the form of social or traditional practices determines
the range of employment that is "appropriate" for women and even the kind of schooling they
wil! receive. Although girls and boys have reached near parity in aggregate educational
indicators (see endnote 4 and Annex B), aggregate statistics conceal important sex differences in
the type of training received (Blau and Ferber 1986). Men and women may specialize in
different fields, with women often concentrating in primary education and nursing and men in
technical and engineering disciplines (HIID 1990), with notable exceptions. These differences
show up in the gender distribution of labor across sectors. Evidence from Argentina, Bolivia,
and Paraguay indicates that. "in general, the higher the technological level of an industry or firm,
the lower the absorption of women. Labor intensive activities and firms employ proportionately
more women than those that are capital-intensive" (Draper 1985:23). This trend is partly
attributable to lower numbers of women with technical training and partly to employers' cultural
assumptions about what kinds of jobs women should hold.










In addition, employee recruitment patterns influence the gender-based sectoral distributions of
labor, particularly with regard to formal versus informal sectors. Research shows that in urban areas,
both female and male immigrants and other new entrants to the labor force can easily get jobs in the
informal sector. Nevertheless, it is very difficult for men and especially women to advance into
formal sector employment. Instead, "in most Latin American countries, rural women become a
permanent part of the service [sector] and informal labor market when they move to the cities. There
is little sign of their transition to industrial employment" (Draper 1985:9). Similarly, rural women
displaced from subsistence production in Guatemala and Mexico are not being absorbed into the work
force of the modern sector when they migrate to urban areas; even middle-class, educated women in
urban areas face gender-based segregation and a limited demand for their labor (Tiano 1986:167).

As modern/formal-sector firms grow and require more labor, rather than pulling it from the
informal sector, they choose "...fresh entrants to the labor force [students] or recruit from relatives
and friends of existing employees" (Mazumbar 1989:59; see also Anker and Hein 1986). Studies
elsewhere in the developing world suggest that "recruitment to formal sector employment occurs
directly from the rural areas much more often than it does through the urban informal sector"
(1989:59). With high percentages of women employed in the informal sector in LAC cities, a
disturbing consequence of favoring new entrants or fresh rural migrants, whether male or female,
may be to "trap" many women, even those with substantial work experience, in the informal sector.

In sum, in promoting investment in industrialization and production for export, prior
examination of present gender distributions and recruitment patterns among the relevant firms
may reveal a potential for gender-based segregation of the labor force. Once recognized, such
potential can be countered in -c; -'pment design with both carrots and sticks information
campaigns and training that stress efficient employment practices and methods of improving worker
productivity levels, and assistance tied to improved labor practices. Unlike more entrenched social
behaviors, skewedness in formal-sector labor recruitment may prove fairly responsive to simple
incentives such as technical assistance or credit for firms that correct gender, age, or other imbalances
in their work force, that advertise employment opportunities publicly, or that actively recruit from the
informal sector.

4.2 Occupational Segregation"

In addition to being concentrated in certain sectors of the economy, women also face
crowding into certain types of jobs. This crowding can restrict women's ability to respond to
changing economic conditions and limit their prospects for promotion and upward socioeconomic
mobility. "Within an occupational group women are almost always in the less prestigious jobs" (UN
1991:87: also Table 9, Annex A). For example, in Central America, 83% of secretaries and 95% of
domestic workers are female, while only 10.5% of lawyers and 3% of engineers are (Garcfa and
Gomariz 1989a). A PREALC study found that between 1980 and 1987, "female participation
increased in those areas [of the modern sector] usually associated with lower levels of productivity
and salary" (Bonilla 1990b:218): this is in spite of relatively high education levels for women in
general in the region, and nearly comparable levels of education for young women and men.

Even the agricultural sector sometimes considered to be more egalitarian than other sectors
- provides a ready example of occupational segregation. Women are more likely than men to hold
the seasonal or temporary jobs in the sector. In nontraditional agricultural exporting (NTAE) -
where women are employed in relatively large numbers proponents have often assumed that women










benefit at least as much as men from increased investments in this sector. Statistics on occupational
segregation among NTAE workers tell a slightly different story, however. As a study of Honduras,
Nicaragua, and Costa Rica shows, women "occupy more than one-half of the jobs associated with
processing or post-harvest handling" (Alberti 1991:2). Moreover, these jobs are seasonal, with many
women being hired only at harvest time. In contrast, men tend to occupy the permanent, full-time
positions.

At a broader level, the employment environment and overall economic conditions in a country
or region may determine the types of jobs women hold compared to men. Bonilla explains the
concentration of women in "jobs that require relatively few modern high-tech inputs" as the result of
women's entrance into the labor force at a time of high unemployment rates, falling salaries, and
highly segmented labor markets in other words, during unfavorable economic conditions
(1990b:219). When unemployment and underemployment for both men and women are high, the
chances of women getting hired for above-minimum wage and/or formal sector jobs decrease. Many
employers in the LAC region view women as secondary wage earners with lesser attachment to the
labor force; thus they give preference to men when hiring for the "better" (i.e., high technology and
higher-paying) jobs (HIID 1990).

The gender literature raises a number of research questions regarding the effects of
occupational segregation in the face of structural adjustment and related economic conditions. First,
occupational segregation may well have been a factor in LAC women's relatively high
unemployment rates during the economic crisis of the 1980s. There are at least two questions to
consider in this area (Berger 1990:24): First, to what extent are increases in women's unemployment
due to decreased employment opportunities for women versus increased numbers of women seeking
work? Second, how has the sexual segregation of occupations in the LAC region interacted with
cutbacks in employment during recessionary periods, compared with the industrialized countries?

A further concern is the repercussions for women of the privatization of public
manufacturing enterprises. In developing countries, the public sector is an important source of
employment for women in industry and agriculture as well as in services (Cagatay and Berik 1990).
These authors point out that public sector employment often offers better wages, working conditions,
and benefits. With the move to privatization, women risk losing a significant source of relatively
high-quality employment in industry. Cagatay and Berik conclude that "a systematic consideration of
gender composition and segregation of employment and the relative conditions of pay and work in
public versus private enterprises is essential" for understanding the impact of privatization schemes
(1990:120). Additionally, Hollister (1992) points out that as countries reduce public sector wage
bills, the cuts often come in the form of decreased wages, rather than jobs. Therefore, while public
sector employment may have offered women better wages than private sector jobs in the past, the
question arises as to whether the wage gap has decreased in the wake of structural adjustment-related
programs; if this is the case, women stand to lose relatively less from the privatization of state-owned
enterprises.

To summarize, occupational segregation affects the distribution of benefits from T&I and
economic growth in general. It also limits the flexibility of the labor market to respond quickly
to changing conditions and employers' needs. Although the gap between female and male LFP
rates is narrowing, occupational segregation continues to deny women truly equal opportunities in the
job market. Gender-based occupational segregation can impact negatively on the rate of private
investment in women's education, the gender composition of unemployment, the effects of privatizing











public/state enterprises, and in the broadest sense, sustainable growth and development. While
industrialized countries suffer from similar patterns of segregation, evidence suggests that LAC
women in many cases face even greater and more deeply entrenched barriers to better quality jobs -
one of the most important benefits of development.

4.3 Wage Discrimination

Discrepancies between women's and men's wages in the LAC work force are difficult to
measure due to the absence of comparable, gender-disaggregated data. In cross-country comparisons,
the problem is further compounded by the fact that wages may represent only a portion of the total
remuneration to workers in the formal sector, particularly where inflation is rampant and the currency
is being devalued; often, the value of employee benefits is equal to workers' basic wages as a means
of protecting them partially from inflation and devaluation (Hachette and Franklin 1990 for Ecuador;
Scott 1986 for Peru). The information that is available, however, indicates that women in formal-
sector employment consistently hold the lowest skilled, lowest paying, and least secure jobs. Wage
discrimination in the LAC region, as in many industrialized countries, is pervasive. Evidence from
the industrialized countries unfortunately does not support the expected negative correlation between
macroeconomic growth and discrimination as labor markets get tighter with reduced population
growth rates (in response to increased socioeconomic development), discriminatory practices are
supposed to become too expensive and inefficient. Nevertheless, in the U.S.. discriminatory practices
have been reduced gradually as a result of awareness raising efforts, educational campaigns, and
legislation, and to a lesser degree because of tightening labor markets. This suggests that wage
discrimination requires direct interventions to make even a dent in the prevalence rates.

Researchers in Brazil and Ecuador used data from censuses, household and employment
surveys, observation, and/or focus groups to investigate wage gaps in various industries. They
concluded that discrimination plays a major role in determining women's wage levels (CEPLAES
1990, Hachette and Franklin 1990, Higgs 1991). A review of industrial sector employment in
Ecuador found that some firms there give different titles to the same job depending on whether it is
held by a man or a woman (Mauro 1991). This practice is also cited as a factor in wage differentials
in Honduras (USDS 1992) and in the U.S. A study by Malkiel and Malkiel of male and female
employees in a U.S. firm showed that estimated discriminatory differentials were eliminated when job
categories were controlled for, though it was clear that the employees were mostly doing the same
work and had similar credentials (Hollister 1992).

Even with equal levels of education and training, women are paid less than men in similar
jobs. For example, in a study of four Latin American cities, women with educational backgrounds
comparable to those of the men studied received an average of 58% (in Sao Paolo) to 83% (in
Panama City) of men's wages in the three categories of professional, skilled or semiskilled, and
unskilled labor (Bonilla i990b). Looking across sectors, however, the overall wage gap appears
smaller in industry. The case of El Salvador is instructive. There. women earn 82% of men's wages
in industrial jobs, compared to 61% in commerce and 65% in services. Whether in El Salvador or
Costa Rica, within the industrial sector, wage differences between men and women range from 11 %
to 33%. varying across age, urban/rural residence, and public/private sector employment.

Doubtless several variables interact with gender in accounting for wage gaps between men and
women in a given job, although there are not many examples of studies that have controlled for more
than one or two variables at a time. One such confounding variable is age. For example, household










survey data from El Salvador show the greatest wage gaps between men and women in the 20-39-year
age bracket, where women average 67% of men's wages in all sectors. This contrasts with 84% and
92% for women aged 10-19 and 40-59, respectively. Explanations for this difference include
suggestions that women in child-bearing/rearing years have lesser attachment to the labor force or are
unduly penalized by employers who expect them to have lesser attachment. Another variable is
residence in rural versus urban areas, which may reflect differences in the supply of qualified labor.
In Costa Rica's industrial sector, rural women do better than their urban counterparts; they earn 78%
of men's wages in -rral areas, compared to 70% i; u-rban L eas. Wome. n alo appear to do relatively
better in the public sector, where unions more closely watch for wage discrimination (see discussion
o. unions in Section 4.4). Costa Rican women employed in the urban industrial sector by private
versus public firms earned, respectively, 78% versus 89% of men's wages (Garcfa and Gomdriz,
1989a:83, 168). In some LAC countries, however, this observation does not apply, as in Chile,
where union activity is banned in the public sector.

The literature offers factors such as the following to explain wage gaps: societal views of
women workers; the sectoral concentration of women workers; gender differences in education,
experience, and hours worked per week; and overt discrimination. Researchers note that as in
occupational segregation women generally are not considered primary breadwinners, and therefore
are paid lower salaries. A study in Ecuador found that industries employing greater numbers of
females have lower average salaries than those hiring predominately males (CEPLAES 1990). A
more recent review of industrial labor force data in Ecuador found that within occupational groups,
there are large gaps in wages for women and men. For example, among artisans/workers (ISCO
6&7) in the food/drinks/tobacco subsector (ISIC 31) in 1989, 35.4% of women earned 2 or more
times the minimum wage, compared to 67% of men (Mauro and Orriola 1992).

Some studies have isolated several other explanatory variables and determined that
discrimination in fact does play a large part in female-male wage gaps in LAC. A recent World Bank
study found that differences in the labor market endowments (education, experience, hours worked
per week) held by female and male employees in LAC explain only 22% of the gender wage gap; the
remainder is explained by differences in how the labor market rewards these characteristics in women
compared to men (Psacharopoulos and Tzannatos 1992). Psacharopoulos and Tzannatos suggest three
reasons why the labor market/employers might pay different wages to a woman and man with equal
endowments:

* employers, observe differences in productivity between the sexes;

* employers have imperfect information, such that they assume productivity differences between
the sexes, even if none exist; and/or

* male and female employees have different tastes (for jobs, working conditions, etc.), such that
they value pay differently.

The importance of productivity differences in determining wage gaps, however, is difficult to
pinpoint, since very little empirical information is available for developing countries. Schultz points
out that "almost no work is being done to estimate the marginal products of men and women" (HIID
i990:24)";. Alternatively, the unexplained portion of the gap can be interpreted as a reflection of
"overt labor market discrimination, defined as different returns for men and women with the same
productivity characteristics" (HIID 1990:19). Studies have found that overt discrimination explains










78% of the male-female wage gap among non-domestic employees in B6gota, and over 60% among
employees in Cyprus and 25-50% in the U.S. (HIID 1990). As to differences across gender in
valence of pay ('taste" for wages), some researchers have found that the effect is two-way "valence
of pay may explain pay differentials between male and female employees, and pay levels affect
gender-based differences in the valence attributed to pay" (Haberfeld 1992:93). Again, though, no
data on valence of pay in LAC were uncovered in the literature reviewed for the present report.

How can gender-based wage discrimination be overcome? A number of researchers suggest
redefining skill definitions and supporting the concept of comparable worth, i.e. that wage levels be
determined primarily on the basis of the value added by the laborer in a production line or the
economic value of a service rendered. Sinclair (1991) points out that most economic theories have
naively assumed that perceived and actual skill levels are the same, but this is not always the case.
Such an assumption facilitates the perpetuation of wage discrimination. In addition to comparable-
worth initiatives, Sinclair and others recommend a focus on redefining skill definitions and associated
wage levels, including consideration of:

traditional economic variables, such as labor supply and demand, demand for the commodity,
formal training, and labor intensity of production; and

S nontraditional variables, such as culture or ethnicity, relative bargaining power of women and
men, and state policies that differentiate between female and male workers.

Overall, research on wage discrimination in developing countries suggests that, where
development support goes directly to industries or firms as in cases where A.I.D. funds EPZ
infrastructure donors should encourage employers to implement the c mparable-worth concept in
setting wage levels. Similarly, evaluations of the determinants of wage discrimination in a given
country or, e.g., of a given A.I.D.-assisted project should consider the implications of both economic
and non-economic variables for gender-based wage gaps.

To summarize the foregoing discussions in terms of the T&I initiative within LAC, the
Bureau needs to be concerned with wage discrimination for at least three reasons (Birdsall and Sabot
1991).

In the short term, wage discrimination can interfere with the success of a T&I program by
depressing employee job commitment and productivity.

In the medium term, wage discrimination interferes with the smooth functioning of the labor
market, by decreasing the efficiency with which labor is allocated across firms or sectors.
This can hamper economic expansion dependent in large part on labor inputs.

In the long term, wage discrimination decreases the private rate of investment in human
capital. By discouraging families and individuals from investing ir education and training
programs for women, it results in a smaller and lower-quality pool of labor overall. In the
LAC region, where increasing numbers of women are heads of households, their ability to
earn an adequate income has critical implications not only for their own well-being but also
for the health, education, etc. of their children and thus for the lablxr force of the future.

Clearly, more detailed research is required on skill and productivity levels of women
compared to men in similar jobs to determine the true extent of wage discrimination in LAC: this will










likely entail a combination of quantitative and qualitative approaches. The most common approach is
to estimate a standard earnings function using detailed individual characteristics, as opposed to direct
measures of productivity (e.g., physical output per worker) which are more difficult to obtain. At
present, we only can speculate about the degree to which discrimination versus differences in
productivity, tastes, or other factors determine gender differences in wages. Assuming discrimination
is as critical a factor in the wage gap as preliminary evidence suggests, however, the important
question for A.I.D. is: how and to what extent will wage discrimination interfere with long-run
productivity and economic growth rates in particular sectors and with sustainable employment
creation for women and men? An added complication arises from the possibility of a short-term
backlash effect of the enforcement of measures to combat gender-based wage discrimination. For
example, policymakers may be confronted with a situation where women workers form a large part of
the work force in export-oriented production jobs but receive lower wages than men in comparable
jobs. Rather than pay higher wages to a large number of female employees in response to the
enforcement of equal pay measures, firms may decide after assessing the cost of labor versus
capital intensive techniques to mechanize the production process, reducing the number of jobs
available for women. In this case, skills training and upgrading or other measures may be necessary
in the short- and medium-teri, to help workers adjust to unexpected repercussions.

Wage discrimination may adversely affect the economy's ability in the medium and long term
to respond to growth-inducing policy and regulatory changes. For example, a simulation of growth
and employment prospects in Ecuador estimated that, if labor and capital market rigidities were
removed, employment and average incomes in manufacturing would respectively increase by about
15% and 20%, and output for the industrial sector as a whole by 6% (Hachette and Franklin 1990).
Tnese figures might well be lower, however, were the effects of wage discrimination to be factored
in, whereby employers offer below-optimum wages to women and thus in the long-run attract female
workers with lower levels of education and hence lower productivity levels. Particularly in
manufacturing subsectors that employ a high proportion of women, this can affect growth in industrial
output. Firms can compensate by: increasing the number of employees (although then they risk
paying out more in benefits); changing the gender mix of the work force; or increasing wages paid to
females (to an efficiency wage), thereby boosting morale while also attracting more productive
employees.

In light of the importance of labor quality and a smoothly functioning labor market to the long
term success of the T&I initiative and to development in general, the widespread wage discrimination
seen throughout LAC should be of concern to A.I.D. The T&I initiative itself provides an
opportunity for A.I.D. to work to combat discriminatory employment practices. For example,
incentives to change destructive patterns of discrimination can be built into projects of technical
assistance, management training and information services to individual firms or worker/producer
organizations; and policy dialogue can include a focus on strengthening regulations that reduce
discrimination against workers, whether it is based on gender, race, ethnicity, class, or age.

4.4 Unionization

The U.S. has an explicit policy to support trade union rights (Box 5). In view of the
legislation linking democratic processes and trade conditions with the U.S., theoretically, a T&I
strategy would include assistance to developing nations to move toward improved worker rights, and
hence allow those nations to enjoy open trading relations with the U.S. In practice, however, this
type of activity is more commonly undertaken by democratic initiatives (DI) programs in the LAC










missions. Yet, it is an area where collaboration
between T&I and DI programs might be useful.

Unions represent one way of improving
worker rights. Women's participation in unions
has had a varied history. In general, past
generations of women tended to have shorter
job tenure than men, and intermittent
participation in the labor force. As a result,
women generally benefitted less than men from
joining unions. Now, however, an increase in
women's share of the permanent labor force is
increasing their demand for union membership.
Gender issues arise in unionization insofar as
unions:

effectively "price women out of the
market";

* fail to include or reach women at all;
and


Box 5: US. Policy on Trade Union Rights
"The right to form free and independent trade
unions is an essential element of a democratic
system" (USDS 1990:1). U.S. regulations
covering the Generalized System of Preferences
(GSP), the Overseas Private Investment
Corporation (OPIC), the Caribbean Basin
Initiative (CBI), and the Omnibus Trade Act of
1988, require that "countries trading with the
U.S. be taking steps to provide the following
five basic worker rights:
* freedom of association,
* freedom to organize and bargain
collectively,
* prohibition of forced labor,
* minimum age for employment, and
the right to acceptable conditions of
work" (1990:1).


* fail to represent the interests of female
(as well as male) employees.

With regard to the first of these issues. by facilitating wage increases and potentially reducing
the demand for labor, unionization can have a gender-specific impact when women are crowded into
low-wage employment. When wages rise in response to union pressure, women may face added
competition for jobs from men. Monitoring the female/male distribution of jobs and promotions in
these situations will allow the identification of such unexpected, adverse effects. Additionally, unions
can sometimes be a source of segmentation in the labor market, with unions and employers combining
their economic interests to restrict free entry into formal sector employment, e.g., through labor
contracts with tenure clauses or other riders (Hachette and Franklin 1990).

Secondly, unions frequently fail to reach out to female-dominated professions or subsectors.
For example, an increasing number of women in the Caribbean work in EPZs where governments
have often suspended the right to organize or in the informal sector where trade unions have not
yet been able to operate effectively (Deere et al. 1990). An assessment of gender issues in several
export-oriented subsectors in Ecuador collected information on 23 NTAE firms and 27 industrial
exporting firms, including several where women formed a majority of the work force; none of the 50
firms had unions (Blumberg 1992). A study of female factory workers in Quito, Ecuador found that
only a limited number of women worked in unionized factories. In those factories that did have
unions, however, only 60% of female employees were members, none held leadership positions, and
few attended union meetings (Mauro 1989).

In general, LAC women during the 1980s were seldom employed in unionized professions or
positions, which probably contributed to greater wage decreases for women than men in LAC during
that period. Citing a 1988 PREALC study, the IDB reports that "the salary decline [was] greater for










the less 'organized' workers that is, for agricultural, construction and minimum wage workers -
who constituted the great majority of workers in Latin America at the outset of the 1980s and an even
greater majority by 1987" (Bonilla 1990b:219). Many of these less organized workers are female. In
Chile, for example, unions of independent workers and temporary and casual laborers (often working
in the informal sector) are permitted and encouraged as a means of helping people survive the
recession. These unions, however, are much less effective than company unions, which are allowed
to engage in collective bargaining and which face fewer logistical problems in setting up meetings and
carrying on their activities. Although Chile's informal sector employed 25% of men in the urban
labor force in 1982 and 40% of women, these workers "cannot have company unions or are expressly
prohibited from collective bargaining" (GAlvez and Todaro 1990:120); these restrictions are applicable
to all employees who work in companies with less than eight employees, a sizeable percentage of the
population. Access for women is further restricted by occupational distribution: "twenty-two percent
of women in the formal sector (13.5% of the urban female labor force) work in the state bureaucracy,
which is not permitted to engage in collective bargaining" ibidd).

In addition to the wage increases associated with collective bargaining, a union presence may
help deter discriminatory job classification practices. For example, non-unionized firms in EPZs in
developing countries "usually classify women's work as unskilled (or sometimes semi-skilled), and
women are paid wages which are significantly lower than those paid to male workers in the zones"
(Sinclair 1991:13). [The author, however, does not indicate whether differences between females and
males in job type, experience, or education were controlled for in arriving at this conclusion.] On the
other hand, older studies in the U.S. found that unions tend to discriminate against women, leading
Hollister (1992) to ask if a weakening of unions in those cases might improve the relative position of
women. None of the literature covered in the present survey, however, provided any insight on this
question.

Along the Mexican-U.S. border, trade unions historically have been active in the maquilas.
But in 1981, these unions were characterized as "predominantly composed of temporarily active
female rank and file members" whose high job turnover rates compromised union effectiveness (Pefia
1981). Within the border industries, unions were relatively rare among subcontractor operations
during the 1970s, where women employees predominate, whereas subsidiary operations faced strong
attempts to unionize. Pefia suggests that differences in the division of labor and technical organization
between subcontractors and subsidiaries may reflect differences in the degree of unionization between
the two, although he points out the dearth of empirical data on this question. This phenomenon has
implications for gender, to the extent that women employees are found in greater proportions than
men in subcontractor operations and therefore may have less access to unions.

Finally, when women do participate in unions, they often find that their interests are not being
represented. It is not clear from the literature whether unions are effectively representing female
employees in LAC. In Brazil's chemical and pharmaceutical industry, for example, female union
members feel that the union does not represent their interests. With women's wages only 60% of
men's, women must work overtime on the weekends to supplement their low incomes. But male
union leaders see weekend work as an infringement of worker rights (Higgs 1991).

In contrast, Nicaraguan women during the 1980s appeared to be making steady gains in
getting unions to represent their concerns. The literature reviewed for the present report, however,
did not provide information on how this situation may have changed since the defeat of the social-
oriented Sandinista Party in the elections of February 1990. In 1985, women made up 40% of










Nicaragua's Agricultural Worker's Union (ATC). This percentage equaled their proportion of
permanent salaried agricultural workers. By 1989, women held 35% of leadership positions in the
ATC and had successfully pushed for the establishment of 108 rural child care centers (Perez-Aleman
1991). By 1989, contract negotiations by the ATC covered paid maternity leave and child care
services. Also in Nicaragua, women industrial workers constituted 37% of the Urban Workers Union
(CST) in !989. At that point, they were negotiating for "the elimination of pregnancy test
requirements for employment and access to technical and organizational training as well as sexual
education" (Perez-Aleman 1991:16).

Caribbean unions' record of representing women's interests has been characterized as poor
and declining (Deere et al. 1990). In firms with a union presence, sexism is reportedly pervasive
among male union leaders, employers, and employees in general. However, the Caribbean Congress
of Labour (CCL) has "at least formally taken up the call for the need to increase women's access to
education and training and to remove discrimination in employment; it also supports such measures as
greater access to child care at the work place" (Deere 1990:99).

In an effort to obtain better representation of their interests and of women-specific labor
issues, women may form their own unions. But research suggests they may not be as effective as
mixed-sex unions. An examination of the Mexico Women's Garment Workers Union, an independent
union with 95% female membership, found "that although the Union draws great strength from its
identity as a women's union, this strength has been difficult to translate into union-related gains such
as new work contracts and improved working conditions" (Carillo 1989:i).

To sunurarize, although the literature reviewed for the present report did not provide a
comprehensive base from which to assess women's representation by labor unions in LAC, a few
trends do emerge. For one, the gender-specific effects of unionization on employment
opportunities, wages, and job quality constitute a high-profile area where (for whatever reasons)
information is sorely lacking. A.I.D. policies on these issues, to the extent that they consider
gender, have necessarily been based on scattered case studies and probably to some extent on
extrapolations from theory and evidence from outside the region. For another, women appear to
form a larger part of union membership in the Caribbean and some parts of Central America
than in South America. This may be attributable in part to past restrictions on union activity during
political upheaval, as in Bolivia and Argentina, such that women formed alternative support systems
(women's groups) to address issues that might otherwise have been dealt with by unions (Beuchler
1985:174). Finally, although the literature gave no evidence of closed-shop or other exclusive union
policies that might prevent women from moving into formal-sector, unionized employment, it is
difficult to ascertain what the lack of published attention to this and other issues signifies. Does it
mean that a given issue is non-problematic? Or simply that research results as yet exist only in
fugitive form? Or, is there in fact a serious gap in our knowledge of gender and unionization in
LAC?

Unions and labor movements have important potential for safeguarding workers' rights in the
face of increasingly competitive international markets. In A.I.D. operational terms, support for these
activities and institutions more commonly originates in the democratic initiatives programs than in
T&I programs: however, this is an area where collaboration between the two programs may prove
useful in achieving the overall goal of "good" development.










4.5 The Informal Sector and Outwork


These same questions apply to the literature on linkages between the informal sector and T&I
particularly export-oriented production. Many of the problems encountered in attempts to analyze
gender issues in unionization also impede full analysis of the informal sector and "outwork."19 For
instance, the literature is largely silent on the importance of outwork (also known as "home
work") in export-oriented production and on whether enforcing labor legislation pushes women
into the informal sector, or keeps them from moving out of it. The informal sector increasingly
absorbs many new female entrants into the labor force (Schultz 1989). Particularly in LAC, women
tend to concentrate in this sector, working as street vendors or doing piecework or industrial outwork
in their homes. Many women and men choose (or are forced by economic necessity) to rely on the
informal sector as their primary source of income. One advantage of such employment for women is
that it can offer them more flexibility in balancing work with child care and other responsibilities
(recall Box 4). Yet in comparison to the formal sector, such employment is generally less secure; it
guarantees no fringe benefits; wages are often less than the legal minimum; real wages are subject to
greater declines in recessionary periods because they are not indexed; and gender-based wage
discrimination can be more severe (Bonilla 1990b, Hachette and Frankiin i990; for a case-study from
Brazil. see JatobA 1989; for additional references on outwork and the inform"n sector, see
endnote3).

During the 1980s, as employment opportunlie; in the formal sector shrank, the informal
sector became a critical source of iobs for both men and women in LAC (Table 10, Annex A). In
Brazil for example, between 1981 and 1983 the informal sector as a share of the urban labor market
grew by 7% (to 35%). compared to an increase of only 1.6% in the formal sector (JatobA 1989:49).
The informal sector is also irmportant tor industrial production.2: Again in urban Brazil, it accounted
for 16% of industrial-sector employees in 1983, including 62% of poor employees ibidd). In
NicaiagC-., where the inform2A sector absorbed 57% of all employed women in 1985, 21% of those
wouic wrkd -- the industrial sector. For Costa Rica in 1983, these figures were 23% and 37%
(Garcfa y GomAriz 1989:84, 382).

Not surprisingly, concrete data on the prevalence of outwork in developing countries are
scarce. The ILO, however, reports that, worldwide, outwork is most common in the industrial
sector, pci;!!y clothing an -xe ii~sk (iLO 1989). The leather and electronics industries also
frequently use outworkers on a piece-rate basis. The ILO gives the example of Germany, where
outworkers are found in the following industries: iron, metal, electronics, opticals, clothing,
chemicals and synthetics, and paper and cardboard processing. Whether in LAC or elsewhere.
women workers generally predominate in outwork.

Some preliminary evidence suggests that outworkers may indeed be affected by T&I.
For example, in Mexico City in the early 1980s, subcontracting involved mostly production for the
domestic market (in plastics, electronics, consumer durables, metals, textiles, clothing, and
cosmetics). Nevertheless, foreign capital played a critical role in the subcontracting chain: of the
firms using outworkers in one study, 16% were multinational corporations while another 69% were
under subcontract to multinationals (Benerfa and Roldan 1987). In other world regions as well,
stagnation in women's employment following increases in large-scale, export-oriented manufacturing
suggests "a possible growth of women's employment occurring outside large establishments, through
homeworking" (Cagatay and Berik 1990).










Outwork has been described as problematic in equity and gender terms because it is difficult
to monitor work conditions, health risks, wages, and so forth in such a labor force. In Latin
America, "piece rates paid to homeworkers in urban areas are less than those paid in factories; but
those for home work in rural areas fall to the very bottom of the wage scale" (de los Angeles
Crummett 1988, cited in ILO 1989:10). Traditionally, labor activists have fought for baas on
outwork "because of universally low returns to workers and poor work conditions where industrial
outwork prevailed" (Ibrahim 1989:1103). Workers frequently are not compensated for depreciation
on their tools, so their real income (wages minus depreciation) is substantially less than it appears. In
effect, employers pass on much of the cost for rent, tools, and machinery to the outwork:rs.
Moreover, with regard to outworker health and safety, "there is mounting evidence of hazards to
health and safety, not only for workers, but for their entire families when industrial outwork is
unregulated" ibidd). Unfortunately, empirical studies to support such assessments are rare.

Industrial growth in LAC generally has been characterized by lower-than-usual labor
absorption rates in the formal sector, because the informal sector has been a strong, traditional source
of employment in LAC and "the predominant instrument for dealing with variable labor demand in
many industries and countries" (Portes and Benton 1984-608). Further, efforts to enforce labor
legislation encourage covert and/or part-time hiring and subcontracting. The problem of i w
absorption rates is compounded by vast and rapid rural-to-urban migration, which generates more
workers than the modern urban sector can absorb.

In Central America, for example, the literature indicates that the result has been a trend
toward industrial outwork. This trend may help explain why, in contrast to other data, census results
show little growth in industrial employment, particularly for women. Guatemala's case is illustrative.
There, the industrial sector absorbed only 19% of women workers in 1987, down from 28% in 1980.
On the other hand, the maquila industry around Guatemala City increased 700% between 1986 and
1989 with an almost exclusively female work force; the extent to which these women are involved in
outwork or subcontracting: however, is either not reported or not known (Alberti 1989).

In the context of T&I promotion, the informal sector becomes an issue insofar as the
emphasis on profitability and cost containment for firms competing internationally encourages
their use of outworkers or subcontractors in the informal sector. Outworkers may be used to
avoid higher formal-sector labor costs resulting from labor market regulations. In some cases, T&I
promotional activities may have encouraged an increase in the use of outworkers, in that:

as workers are pulled toward EPZs and assembly work, it is common for new patterns of decentralized
outputtmg assembly, information processing and service work to emerge. This spinoff work from
multinational plants is often organized outside government regulation as part of the informal sector,
where work is done in the home or in unregulated sweatshops (Bourque and Warren 1990:91).

Some economists argue that outwork is not a viable substitute for formal sector production
given the requirements of quality and reliability for production for the international market. For
example, noting that labor deregulation of the formal sector in developing countries is often
necessary, Krueger suggests that "the scope for substantial growth of exports based on informal sector
production is probably highly limited ... [given] me demands of the international market for
uniformity, large-scale shipments, and timely delivery" (Krueger 1988:374). In fact, she considers
that labor market regulations such as wage restrictions, mandatory job security and benefits, or
wage indexing that raise the cost of formal sector labor "would discourage exports even in the









presence of a low-wage informal sector" ibidd; italics added). This hypothesis has not been examined
systematically nor empirically tested; such an analysis would be valuable in shedding light on the
effects of T&I promotion on women and men workers in the LAC region and elsewhere, and for the
success of such initiatives. One question to consider in this regard is whether low wages are the price
of an export-driven, labor sr-plus economy, or are there viable alternatives? Related issues some
of the pros and cons of deregulation are discussed in greater detail in Section 4.7.

Various authors and organizations (e.g., Benerfa and Roldan 1987, Bourque and Warren
1990, Nash and Fernandez-Kelly 1983, UN 1989) have pointed to a number of outwork issues that
require research and merit increased state (and presumably donor) attention. These can be
summarized as follows.

For the industrial sector, should the state encourage multinational production, and
how should it respond to the resulting pattern of centralized and decentralized
production?

Formal-informal sector linkages in manufacturing regarding women's participation in the
industrial sector need to be researched and the findings utilized in designing human resource
programs (e.g., with attention to the numbers of female/male workers and the tasks they
perform).

Technology appropriate for formal sector employment needs to be studied for the development
of training and technical cooperation programs.

S The practice by large, formal sector firms of subcontracting to small and/or home-based,
informal sector units needs monitoring to determine the relative advantages and disadvantages
for female and male small-scale entrepreneurs.

Polcy dialogue regarding state regulation of the industrial sector and foreign direct
investment needs such information in order to proceed in a manner that protects workers' rights
while encouraging sustainable employment growth in LAC. And as noted above, human resources
development programs need the information in order to provide appropriate education and training for
workers. A further consideration for A.I.D. relates to the design or evaluation of methodological
tools using employment figures as accurate performance indicators (recall Box 3). Employment
figures alone may understate the effects of T&I promotion activities, and therefore not provide
accurate indicators of success (or failure).

In short, given the present !ack of empirical data, at present one can say only that the
informal sector and outwork may play a significant role in export-oriented industrial production in
LAC. It is possible that employers will continue to use the informal sector to avoid the higher costs
of formal-sector labor, including mandated fringe benefits, limited work weeks, restrictions on layoffs
and dismissals, wage indexing, and safety and health regulations. If so, an A.I.D.-supported export
focus may exacerbate this trend. Nevertheless, A.I.D. and host country governments must consider
the tradeoffs and potential criticisms entailed by deregulation of labor markets. Comparisons are
being made with the U.S. and other industrialized nations that have highly regulated labor markets
(particularly concerning health and safety) and hard questions are being asked about why developing
countries should have "lesser* standards. These issues and others have implications for various T&I-
related concerns in which gender issues are explicit or implicit, including, e.g., the distribution of










benefits from T&I, the development of a thriving formal sector, the establishment of an efficient tax
base, and the safeguarding of worker rights and health.

4.6 Occupational Health and Safety, and Environmental Concerns

Some disturbing trends about health and safety regulations have been reported for the LAC
region, particularly among agroprocessing industries. Preliminary evidence points to dangerous levels
of employee exposure to pesticides. Exposure is especially great among workers who do stoop labor,
such as weeding and harvesting of fruits, vegetables, or flowers (Blumberg 1992, CEPLAES-UNFPA
1990). The relatively high proportion of women employed in such work raises serious questions
about long term health risks from agrotoxins and about associated health care costs for women
workers (especially those of child-bearing age) and for both their nursing and unborn children,
who are at risk of exposure to tainted breast milk or even in utero pathologies.

For example, a study of cholinesterase levels in nearly 400 employees of Ecuador's largest
flower export firm found that of 178 women who were directly exposed to pesticides in their work,
13% experienced a drop of 30% or more in their cholinesterase levels, putting them at risk for long
term liver and kidney damage. Among the firm's 136 male employees who were directly exposed to
pesticides, however, only 3% were at similar risk (Andrade, cited in Blumberg 1992). Were data on
the occupational distribution of females and males in this flower firm available, they would likely help
explain why four times as many women as men had such depressed leave's of cholinesterase. Casual
agricultural laborers face added risks, as employers may require them to furnish their own pesticide-
protection gear. Among female casual laborers interviewed by Blumberg (1992), all were poor and
none wore protective clothing, presumably because they could not afford it. (See also Lecha. et al.
1989)

Health risks are also associated with certain industries such as chemicals and pharmaceuticals,
which hire a significant proportion of women in Brazil, Ecuador, and Venezuela. Recent case studies
indicate high levels of exposure to industrial chemicals and solvents, including some with known
abortifacents (e.g., mercury, phosphorous, lead). In Ecuadorian ceramics plants, which frequently
employ women in large numbers for detail work, dust inhalation and noise, respectively, contribute to
chronic bronchitis and deafness among female employees (CEPLAES-UNFPA 1990). Maquila jobs
in Mexico have been described as "often dangerous, involving toxic chemicals in plants with
inadequate ventilation, or requiring workers to use machinery without safety devices" (Mirowski and
Helper 1989:29).

Such disregard for employee health, whether women's or men's, is difficult to measure in
many parts of LAC, given that under-reporting of work-related illness or injury is common,
enforcement of safety regulations is weak, and the informal sector is so large (e.g., Frumkin and
Cimara 1991). Additionally, published health and safety data are seldom disaggregated by gender, so
it is difficult to detect correlations between risk levels and occupation by gender.

In sum, information about toxic risks, occupational disease and injury, and the actual
impacts of legislative and regulatory systems on a gender-disaggregated basis should be viewed
as a critical input to decisions regarding regulatory reform and protection for the health and
safety of workers employed in the increasing numbers of donor-encouraged export-oriented
enterprises. At present, we have very little information about the incidence of pesticide-related
illnesses and other occupational hazards among LAC workers by gender, although it appears that









several environmental groups are looking into these and related questions as a result of concerns over
the North American Free Trade Agreement (NAFTA). Without this information, it will be
impossible to gauge, particularly in new industries, how much or little protection is needed and who
is at greatest risk, and to advise policy makers accordingly.

4.7 Protective Legislation

There are strong arguments in the literature both for and against labor regulations in
developing (as in developed) countries. When gender is considered, the arguments become more
complex, with the optimal solution lying somewhere between strict regulation and deregulation, as
discussed below. Writing about urban employment in the LAC region, Tokman warns that "policies
intended to reform labour codes and social security systems are being suggested without sound
analysis of the existing situation nor of the relevance of available prescriptions to the Region's
specific problems" (i9,9:169).

As discussed in Section 2, improving the legislative and regulatory environment for trade and
investment is a focus of the T&I initiative. One of the objectives of policy dialogue in this area is to
remove impediments to growth, such as regulatory barriers to investment flows or restrictive labor
codes that slow resource reallocation during structural adjustment and hinder foreign investment
(Fischer 1991). Arenas of gender-relevant protective legislation that are discussed in the literature
include:

minimum wages.

occupational health and safety regulations, and

S legislation covering outwork.

Regulating the minimum wage is one common form of protective legislation in LAC, although
there is much debate about its net effect on employment because the regulations are rarely enforced.
Theoretically, enforcement of a minimum wage increases the proportion of the labor force and
particularly the proportion of women working in the "uncovered" (informal) sector (Schultz 1989).
Schultz suggests that this phenomenon is present in Latin American countries, due to the high
incidence of labor market distortions, including protective legislation which, he maintains, "hinders
the expansion of employment by firms and impacts most strongly on women who are paid less than
men and thus are more likely to be excluded from minimum wage employment by firms" (Schultz
i989:32). Nevertheless, research in the U.S. found that the increase in the minimum wage in the late
i980s did not reduce employment (Card et al., cited in Nasar 1992). Horton et al. (forthcoming)
conclude that the results for the LAC countries they studied are mixed, and others suggest that
prevalent job security legislation in LAC is a much more important constraint (Hollister 1992). Many
authors also question whether eliminating the minimum wage really would improve employment
prospects for unskilled workers, particularly given that employers commonly ignore labor legislation
for this group (e.g., Eaton 1992:392, Hollister 1992). Finally, in the absence of an enforced
minimum wage, informal sector employment is relatively more attractive to some women anyway,
given the additional flexibility it offers.

The labor codes of many LAC countries have comprehensive occupational health and safety
regulations. These range from limits on the length of the work day/week to rules about exposure to










hazardous materials. The degree to which regulations are enforced varies across countries aid
between urban and rural areas; but in many cases, enforcement is at best sporadic. These ':or codes
often date from the 1930s, when the International Labor Organization (ILO) actively lobbiedc
governments to pass protective legislation, particularly safeguarding female employees. Labor
activists, employees, and feminist groups now view many of the resulting regulations as outdated. An
example is the longstanding prohibition of nightshift work for women, which some countries (e.g.
Argentina) are now repealing. Other regulations may not, in practice, offer the protection they
intended to mothers and unborn children. An example is providing maternity leave as a way of
protecting them from exposure to harmful substances. But in fact, many women will continue
working until parturition so as to be able to spend their leave with the newborn infant (CEPLAES-
UNFPA 1990).

Also common throughout LAC is protective legislation covering outwork." The literature
focuses less on the deterrent effect of outwork legislation on women's employment than on whether it
provides sufficient protection. Because this legislation applies to the informal sector, governments
face even greater hurdles in enforcement, and the laws often are ignored. To avoid complying with
the laws, some firms do not report the outworkers as employees. Consequently, "Trade unions point
to the widespread phenomenon of clandestine home work in countries with home work legislation
where employers seek to avoid application of the law" (ILO 1989:22).

The ILO reports considerable concern among labor activists in LAC about employment
conditions for outworkers. In Peru, the National Institute of Planning has recommended that the labor
inspectorate compare sales with reported output, as any difference would be a sign of undisclosed
home work (ILO 1989:24). In a 1989 letter to the ILO, the Barbados Workers' Union expressed
concern about the trend toward homeworking and other forms of private contracting, whereby
"employers are dispensing with their responsibility to provide social security benefits, a safe and
healthy work environment, employment protection and avoid dealing with trade unions by claiming
that workers are not employed by them but are contractors" (ILO 1989:178). The Federation of
Private Enterprises in Central America and Panama took a more moderate position in 1989: "Home
work is an important factor which may facilitate the incorporation of part of the population into the
[labor force]. It is clear to us that legislation aimed at avoiding the abuse of homeworkers should
exist. ... It has been demonstrated that this new kind of work has important advantages, even though
its real benefits have not yet been evaluated" (ILO 1989:173).

In recognition of the increase in outwork as a result of deregulation of the labor market in
some countries, in 1989 the International Confederation of Free Trade Unions in 1989 called for a
worldwide census of homeworkers, special union programs to lobby for protective legislation,
collective bargaining for homeworkers, and a general resistance to "economic policy decisions that
destroy the livelihood of [homeworkers" (ILO 1989:174).

The desire to promote free markets in LAC while maintaining socially acceptable
standards of employment has given rise to a number of arguments for and against protective
legislation. The arguments include a demand-side focus on economic costs and global competition
for investment and a supply-side focus on opportunity costs. The demand-side arguments suggest that
protective legislation may in some cases be an important constraint to women's ability to contribute to
and benefit equally from increased trade and investment, insofar as it deters firms from employing
women or depresses investment in female-dominated subsectors of a country's economy. Many LAC
women (and men) hold jobs that are not protected by labor laws (e.g., in small-enterprise, domestic,










or informal-sector work). But when labor legislation does apply to women's work, some contend, it
has "a dual impact: it improves the conditions of the work but raises the cost of employing women,
thereby 'protecting' them from their jobs" (Draper 1985:11; also HIID 1990). Prohibitions against
nightshift work for women, mandatory maternity leaves, and other benefits increase the cost of
female, relative to male, labor. Theoretically, therefore, these increased costs constrain demand for
female labor in the formal sector, assuming legislation is enforced.'

A broader demand-side question is to what extent labor regulations influence investment
decisions by foreign and/or domestic fi-ms (Ibrahim 1989, Krueger 1988). For example, a firm
considering investment in textile factories or light manufacturing can generally expect to hire a large
share of female employees. A p:ior review of labor regulations may sway investment in favor of
South Asia, where regulations are less onerous than in many LAC countries. Following upon the
1974-1975 recession, the Mexican government was confronted with just such a situation vis-a-vis
North American firms operating maquilas in the border region. "Claiming tha: certain legally-
mandated workers' benefits decreased Mexico's attractiveness as an investment site, the firms
threatened to relocate in nations with lower costs" (Tiano 1984:3). Subsequently, maquilas were
exempted from several requirements, including those ensuring job security and limiting temporary
employment. Caribbean feminists, among others, have argued that firms locating overseas to take
advantage of cheap female labor provide no long term benefits to a country or to the women they
employ. The feminist attitude is "let them locate elsewhere." Nevertheless, the literature provides
evidence that foreign investment and export-oriented firms, while not paying wages comparable to
those in industrialized countries, often affer women better work opportunities and conditions relative
to other options for female employment at the time. Policymakers are considering other routes to
increasing international competitiveness which can potentially allow LAC export-oriented industries to
maintain reasonable wage levels and wxrk conditions while successfully competing against countries
with lower labor costs (e.g., in southeast Asia). These include lowering other costs of production,
such as high import tariffs on intermediate and primary goods; capitalizing on LAC's relatively lower
shipping and transportation costs to Ncrth America: and improving regional distribution in response
to LAC consumers' increasingly open attitudes toward LAC products.

On the supply side, however, maternity leaves and other benefits like child care substantially
reduce the conflict between women's work outside the home and their maternal roles. These women-
specific benefits can ease female entrance into the labor force, thereby increasing the pool of labor
from which firms can draw. Protective legislation, when enforced, can lighten the double burden of
women coping with formal employment without many of the time-saving household devices available
in industrialized countries. It also can prevent exploitation of female and male workers and counter
discrimination against women and minorities, for example, by legislating work conditions and
minimum wage levels. Thus some authors (e.g., Standing 1989) warn against labor deregulation,
arguing that it may widen the wage gap between women and men and relegate more women to low-
wage employment. Labor deregulation taken too far can lead to formal-sector work conditions that
mimic those in the informal sector. This is a particular danger in subsectors that face highly
competitive domestic or global markets.

Research evidence concerning the net effect of protective legislation is contradictory. An
analysis of the early industrialization process in the U.S. showed few or no negative effects of the
introduction of protective legislation on women's employment (Goldin 1990). On the other hand, a
study in Egypt found that, following the enactment of protective legislation, "firms quickly divested
themselves of female workers" (HIID 1990:17). In LAC, the situation is reversed, as policymakers










are considering the removal or relaxation of regulations already in place. Therefore, research is
needed to determine how the market and individuals will respond to deregulation will the
demand for female workers increase in response to lower costs? or will there be no change, with
the supply of female labor gradually declining in response to greater role conflicts and fewer
benefits from work outside the home? Researchers have suggested alternative scenarios, such as
enacting legislation that provides benefits yet prohibits discrimination, and paternity leaves that help
reduce the distortion between female and male labor costs.

Activists and policy makers have been challenged to stop sending mixed signals about formal
sector wage employment, protective legislation, and job displacement. "As long as government
officials receive mixed signals from their pro-women constituencies, they can justify nearly any action
or failure to act" (Ibrahim 1989:1105) Ibrahim recommends that donors and labor activists:

encourage better interaction between private employers and government;

8 more carefully mrtnitor and forcee regula'tio.is;


a improve the information av-aiable to decision makers, e.g. via research on the effects of labor
laws; and

a strengthen labor organizations that are working to improve women's jobs.

As part of A.I.D.'s effort to enhance the T&~ environment, deregulation has the potential to
either better or worsen women's employment opportunities. ,When encouraging government
deregulation of the labor market, an initial analysis of the costs anM benefits of existing regulations
would be appropriate, particularly regarding protective legislation that is based on gender or that has
a gender-differentiated impact. By analyzing both the financial and social costs of key regulations,
research can suggest to policymakers which regulations should be retained, removed, or
modified in the interest of promoting a smoothly functioning labor market while maintaining
certain socially beneficial or culturally important proective measures. For example, generous
maternity leaves might be highly valued by a country for their long-run benefits and therefore
outweigh the risk of deterring female employment in the fonnal sector.

To summarize, a better understanding of gender-specific aad other effects of protective
legislation on T&I and employment is needed in the following areas.

* What effect, if any, will the loosening of minimum wage legislation have on employment
opportunities for women and men?

* To what extent is the introduction or enforcement of legislation correlated with increasing
proportions of women employed in smaller enterprises or as outworkers, such that employers
avoid complying with many regulations?


* To what extent are which existing health and safety regulations enforced or not enforced,
possibly with gender-based differences?










How large a share of employers are affected by which regulations (e.g., the proportion of
firms with over 10 employees, thereby subject to certain labor regulations)?

What exemptions from labor regulations, including health and safety regulations, are in place
for export-oriented firms or firms operating in free trade zones, and to what effect?

To what extent do foreign and domestic investors consider the costs of labor regulation in
deciding where to locate new facilities?










5. SUMMARY OF OVERALL RESEARCH RECOMMENDATIONS


The literature offers a series of arguments for considering the direct and indirect linkages
among gender, employment, and some of the policies and programs advocated through the LAC
Bureau's T&I initiative. Two key themes permeate these arguments: LAC women's traditionally
disadvantaged position in the labor market relative to men; and the need for a well-functioning labor
market with full access to the scope and quality of human resources required to develop an
internationally competitive production base.

Several questions were raised which link people-level concerns with T&I-related issues. For
example, how do export development programs affect the relative demand for female and male labor
in a given industry? What are the implications for worker skills and education requirements, and do
A.I.D.'s training or institutional support programs have any capacity to provide assistance in this
respect? Is the supply of qualified labor sufficient to meet demand as firms expand? Are there
regulatory requirements (e.g., maternity benefits) that appear to restrict demand for female labor?
Conversely, are there requirements or exemptions (e.g., in EPZs) that increase that demand by
lowering costs? Is information on the labor force and labor regulations being provided to potential
investors and to what effect? Do women appear to be at higher risk of occupational disease in a
given industry, due to their concentration in certain jobs/activities? If so, can A.I.D.'s technical
assistance programs and information services address worker safety issues or tie assistance to
improved conditions? Likewise for discriminatory practices, which require attitudinal changes. Can
A.I.D.'s programs be a vehicle for testing pilot educational campaigns to increase firm and worker
productivity by reducing discrimination?

Several gaps in our knowledge of gender and T&I issues have been identified in this paper,
some of which are alluded to above. These are summarized below as research recommendations.
While many of these recommendations flow directly from the analysis in the body of the report,
others derive from suggestions and comments made by reviewers. Still others emerge from the
juxtaposition of the literature review with LAC programs and policy initiatives, and thus do not
appear previously in the report. In many cases, the recommendations are directly linked with the
LAC Bureau's programmatic interests. In others, background research is recommended; such
recommendations are included because they represent information that is critical for policymaking and
program decisions when people-level concerns are considered. The recommendations are reproduced
below in the order in which they appear in the report; however, those which are relatively high
priority have been highlighted with stars in the margin.

Employment Effects of T&i

S*" Skills Match and Technological Change. The question of skills match in the emerging
export-oriented sectors arises in the context of efficient production and the efficient allocation
of human resources. Ideally, labor should move into private enterprises in these sectors as
investment pays off and jobs are created, with a variety of skills being called for. Training to
upgrade rural women's and men's skills in agribusiness-related jobs, for example, could give
them a comparative advantage in making the transition to a newly emerging subsector.
Alternatively, skills upgrading programs can help women retain traditionally female jobs when
industries modernize. For example, in response to direct foreign investment or joint-ventures,
a more open trade environment, and/or the pressures of international competition, some
traditional industries may introduce new production technologies for which women, in










particular, are poorly trained. What kind of skills training is needed to allow women to retain
jobs in industries that have traditionally offered them employment, rather than lose those jobs
to men? Two subsectors where LAC women are already being edged out because of new
technology are food processing and chemicals; better documentation of the effect of
biotechnology and other innovations on the structure of employment in these subsectors would
allow program design to mitigate the negative effects (UN 1989:187).

Recommendation: Background assessments of labor requirements and the employment
effects associated with the introduction of new productivity-enhancing technology -
including skills profiles of the type of worker needed "should take into account the
local characteristics of the production structure and skill availability" (Tokman
1989:169) by gender, and class, ethnicity, and age if possible. This will help
determine how well-suited local firms and workers are for the new technologies, and
vice versa. These types of studies may be most appropriately carried out by research
institutions already receiving A.I.D. support, i.e., via institutional development
components of misson-level projects. In some cases, A.I.D. may consider supporting
skills upgrading and short-term training, particularly when a changing industry or
process historically has been dominated by a single-sex work force that may have few
alternative sources of employment. Program and funding support for training efforts
may be found in offices other than T&I in some USAIDs, depending on the nature of
a mission's T&I program. Increased collaboration among T&I, training, and
democratic initiatives efforts may allow the mission to identify existing programs that
can be used to achieve T&I-related skills upgrading and training goals.

Effects of an Open Trade Regime on Employment. How the move to freer markets will
affect gender distributions in employment and the labor force in LAC is unclear. For
example, the existence, intensity, and duration of a feminization of the work force in export-
oriented production is not well-documented in LAC. Yet it has significant implications (e.g.,
labor costs, social costs) for both employees and employers, as well as for human resource
development programs.

Recommendation: To analyze the implications of the move to freer markets for the
gender composition of the work force including any evidence of feminization (or
masculinization) of the work force in specific sectors or subsectors background
research studies might be supported to compare economies under open versus
restricted trade regimes. Such studies should focus on, e.g., the size and nature of
the formal/informal sector, industrial concentration, and size distribution of firms, in
order to estimate changes in the demand for labor in a country making significant
efforts to open its economy. Economic analysis of household-level income and
employment information will allow development planners to measure the impact of
changes in the trade regime at the micro level, and to tailor human resource and social
programs accordingly. These efforts may be best suited to research related to the
policy dialogue or institution-building components of a T&I program, which may
include support for socio-economic or economic research institutions focusing on the
private sector and trade liberalization.

S Privatization Schemes. Public sector employment in developing countries often offers
women relatively more opportunities than the private sector for advancement, better wages,










and less discrimination in benefits and other job parameters. In order to understand how
privatization will affect women's and men's employment opportunities in the short- and long-
term, "a systematic consideration of the gender composition and segregation of employment,
and the relative conditions of pay and work in public versus private enterprises is essential"
(Cagatay and Berik 1990:120). Similarly, gender-sensitive research "on the effect that a less
dynamic role for the public sector could have on the overall employment situation, its impact
on unemployment and on the demand for skills" will provide valuable information to planners
looking for ways to smooth the transition from a public to a private sector orientation
(Tokman 1989:170).

Recommendation: Government decisions as to whether or how to privatize are
unlikely to be influenced by research showing that women or men are
disproportionately affected by the process. Nevertheless, the people-level effects of
privatization are critical for understanding the environment in which the process will
take place, the extent and nature of displacement in the labor market, and the expected
level of public support (or lack thereof). The two research questions posed above -
comparing private and public employment conditions and predicting the likely effects
of privatization in a given labor market may not find a place in a mission-level T&I
program. This type of research is probably more suitable at the bureau level, where
the findings can then be transformed into mission-level recommendations that can be
applied to a T&I program or to broader policy dialogue, ESF or PL480 programs.

Discrimination in the Labor Market

S Interactions of Sectoral and Occupational Segregation, Unemployment and Gender. An
important question raised in the wake of structural adjustment and recession in LAC in the
1980s is: how does sectoral and occupational segregation interact with cutbacks in
employment? In times of economic stress or stagnation, do women face higher rates of
unemployment than men because of their concentration in certain sectors and occupations?
And to what extent does segregation limit women's ability to adjust to recession? How do
class, age, race, and ethnicity interact with gender to determine an individual's response to
recession or to a changing labor market in the wake of new trade, investment, and industrial
policies?

Recommendation: Understanding the mechanisms by which women and men are
segregated into different sectors and occupations will help A.I.D. identify strategies -
e.g., training, job placement assistance, and information/educational campaigns to
assist women to penetrate those occupations and industries from which they appear to
be excluded (Hollister 1992). Cross-country study of differences in the distribution of
females and males by industry at the 3-4 digit level (see endnote 8) and analysis of
what gives rise to those differences would be useful in this regard.

A breakdown of occupational groups at the two-digit level might shed some light on
the interaction of gender with other socioeconomic variables notably class. For
example, in Table 9, Annex A, a greater share of the female versus male labor force
falls into the professional/technician group in four of the countries listed. Further
analysis could reveal whether this distribution primarily reflects women's
concentration in such professions as teaching and nursing, or whether it is a function










of a class structure in which women in the upper classes disproportionately pursue
specialized education in, e.g., law, engineering, research, and the arts relative to men,
and thus have unexpectedly high levels of representation in this group.

One approach to the kinds of studies outlined above would be to analyze time-series
data for trends in labor force participation rates and characteristics, drawing in part on
the 1990 censuses that are now available in many LAC countries.

Recruitment Patterns. An examination of recruitment patterns by formal sector firms in
LAC, as has been done in other developing regions, would help identify sources of gender-
based segregation and provide some answers about how to overcome it.

Recommendation: While this type of research is perhaps more "academic," the
results can be translated into A.I.D. operational terms, with specific programmatic
recommendations identifying whether and where it might be appropriate for A.I.D.
missions to address this issue in their technical assistance or institutional development
efforts.

* ** Wage Discrimination. Wage discrimination slows economic growth by depressing employee
productivity, interfering with the allocation of labor across firms and sectors, and
discouraging private investment in education and training. Theoretically, steady
macroeconomic growth combined with declining population growth rates over time should
decrease the prevalence of discriminatory labor practices as labor markets get tighter.
Experience in developed countries, however, provides little support for this relationship.
Rather, it appears that major regulatory and attitudinal changes are required before
discriminatory practices are even minimally reduced. The current lack of data on women's
and men's marginal productivity in like jobs makes it difficult to determine the extent of wage
discrimination in the LAC region based on direct measures of productivity, but the available
information suggests that it is a serious problem.

Recommendation: Realistically, mission-level T&I programs do not appear to be a
likely place for research on wage discrimination; this is probably better suited to 'he
bureau level. Yet, mission T&I programs may be able to provide from proje, (-
level social soundness analyses, sector assessments, evaluations, and in some cn es,
monitoring and evaluation systems case-study data about discrimination in c. ain
industries. Such information would make an important contribution to any lar.:.
research efforts, and its collection and dissemination should be encouraged.

More specifically, an initial step toward improving the welfare of women and others
who face discrimination in the labor market would be research into two factors and
how A.I.D. programs could address them. First, how can fair wage practices be
promoted through A.I.D.-supported T&I programs? Second, what role should the
comparable worth tenet play in A.I.D's LAC programs? Here, one approach might
be to use time-series regression analysis for male and female workers with as many
variables as are available (e.g., education, hours worked, experience, and so on),
combined with qualitative study of the non-economic determinants of discrimination
(see endnote 9).










To better assess the parameters of the problem, additional background research might
focus on the extent to which overt discrimination as opposed to gendered productivity
differences contribute to the wage gap between LAC women and men. Existing data
can be tapped to examine wage differences in female-dominated versus male-
dominated industries or occupations in a country, controlling for the value of outputs
or services, among other variables. For example, a standard earnings function can be
estimated with detailed individual characteristics the most common method of
measuring skill and productivity levels.

Labor Movements

* '" Unions and labor movements have important potentials for safeguarding workers' rights vis-a-
vis increasingly competitive international markets. Yet unions in the LAC region have been
characterized as non-responsive to women workers' concerns. Moreover, unions generally
are unavailable to the large numbers of women and men who work in the informal sector.

Recommendation: In A.I.D. operational terms, support for unions, labor movements
and related activities more commonly originates in democratic initiatives programs
than in T&I programs. However, this is an area where collaboration between the two
may further the overall goal of "good" development.

Here, A.I.D. could address two specific research questions either at the mission or
bureau ievel. First, the extent and nature of women's participation in unions in the
region (or country) and of unions' effectiveness in representing women members'
concerns should be investigated. Second, there are large numbers of workers,
primarily in small businesses, who currently have no access to unions. These workers
often seek a means of organizing around work issues; yet they have been offered little
assistance. Similarly, the frequent bar on union activity in EPZs leaves those workers
without effective representation; but alternative forms of organization might provide
an answer. Applied research could build on successes and failures in unions
elsewhere such as those of independent and temporary workers in Chile to
suggest creative ways in which unions might adapt to the informal sector.

Formal-Informal Sector Linkages

* The effect of T&I promotion on formal-informal sector manufacturing linkages has
implications for the gender distribution of benefits from T&I initiatives and thus also for
development impacts. At present, data are particularly scant on the extent of outwork in LAC
and on whether outwork is increasing or decreasing in response to T&J promotion and
increased free trade.

Recommendation: Information on the incentives for both employers and employees to
participate in subcontracting and outwork arrangements is critical to determining how
regulatory changes linked to T&I initiatives will affect outworking trends. An
analysis of the social and economic benefits and costs of industrial subcontracting, for
example, would help policymakers decide whether subcontracting should be
encouraged or discouraged.










Occupational Health and Safety


S** Gender-disaggregated information about toxic risks, occupational disease and injury, and the
enforcement of workplace health and safety regulations is a necessary input to decisions
regarding regulatory reform and protection of the increasing numbers of employees in donor-
encouraged export-oriented enterprises. At present, we have very little information about the
incidence of pesticide-related illnesses and other occupational hazards among LAC workers by
gender. Particularly in new industries, without this information it will be impossible to gauge
how much or how little protection is needed and who is at greatest risk, and to advise policy
makers accordingly. Certainly, this kind of information will not and probably should not
influence decisions about which sectors A.I.D. targets for export assistance. Nevertheless,
A.I.D. can assist in documenting these problems. Where indicated, existing channels of
assistance could be identified to encourage or introduce educational programs for workers and
employers about workplace health and safety.

Recommendation: In light of the disturbing preliminary evidence, project-level social-
soundness analyses, background assessments, and evaluations, where applicable,
should document gender differences in the incidence of pesticide-related illnesses and
other occupational diseases and injuries in the relevant A.I.D.-supported sectors of
T&I, such as export-oriented agroprocessing. When possible, data collection should
extend to the informal sector and should include potential health hazards related to
outwork (such as the unregulated use of toxic chemicals in electronics assembly piece-
work in the home).

Protective Legislation

* ** A better understanding of the gender-specific effects of protective legislation on both T&I and
employment would help A.I.D. missions encourage a productive mix of investment incentives,
flexible labor markets, and worker safety and rights. At a minimum, enhanced understanding
of this issue should reduce the adverse effects of T&I and regulatory reform activities on
workers in related sectors. Strategies to address the issue of protective legislation may entail
collaboration among different offices at the mission level, including those dealing with policy
or legislative reforms; with local business or worker associations that may be involved in
lobbying (T&I); and with unions/labor movements (democratic inititiatives).

Recommendation: Whether at the mission or bureau level, answers to a number of
research questions would greatly increase our understanding of the linkages among
protective legislation, T&I, and sound, fair development. For example, an assessment
of the regulatory environment might ask the following questions. How large a share
of employers are affected by which regulations? To what extent are which existing
health and safety regulations enforced, possibly with gender-based differences? What
exemptions from labor (including health and safety) regulations are in place for
export-oriented firms or firms operating in free trade zones, and to what effect? To
what extent do foreign and domestic investors consider the costs of labor regulation in
deciding where to locate new facilities? And to what extent is the introduction or
enforcement of legislation correlated with increasing proportions of women employed
in smaller enterprises or as outworkers, such that employers avoid complying with
many regulations?










In general, analysis of both the financial and social costs of key labor regulations can
suggest to policymakers which regulations should be retained, removed, or modified
in the interest of promoting a smoothly functioning labor market while maintaining
socially beneficial or culturally important protective measures.

Additionally, T&I and DI programs that support business or worker associations,
unions or labor movements might provide A.I.D. an opportunity to engage in dialogue
about these issues, and influence the direction of lobbying or labor contract
negotiations.

Measurement Tools

Export Performance and Female Intensity in the Manufacturing Sector. One way of
measuring the impact of an outward oriented trade policy on women is to evaluate the
relationship between female intensity of the workforce (women's share relative to men) and
export performance in the manufacturing sector (Box 3 and endnote 15). Estimates of this
relationship are available for developing countries as a whole (Wood 1991). Similar analysis
specific to LAC could give insight into the degree to which women might be expected to
contribute to and benefit from an export orientation. An extension of this analysis would
yield comparisons between women and men.

Recommendation: Again, this line of investigation is fairly academic, but it is
included here as an example of the type of broader background research that is
occasionally carried out at the bureau level.

Informal Sector. There remains a tremendous need to develop valid, proximate measures of
informal-sector employment and other labor market characteristics that can capture differences
and similarities between women and men working in the sector. These measures are
particularly important for assessing change and program impacts in urban areas in LAC,
where the informal sector plays such a vital role in the economy.

Recommendation: Such research is most appropriate at the bureau or agency level,
which has relatively more program options under which to fund it. Yet it has
applications at the mission level, where, .or example, better informal-sector measures
could improve the accuracy and scope of monitoring and evaluation systems.












ENDNOTES


1. The other desk reviews in this LAC WID Research initiative include "Gender and Agriculture & Natural Resource
Management: An Overview of the Literature for Latin America and the Caribbean." and "Gender and Democratization: An
Overview of the Literature for Latin America and the Caribbean.' Additionally, field-work in each of the three sectors was
conducted: a quantitative analysis of household employment data in Ecuador for the industrial sector; a survey investigating
gender and democratic processes at the municipal level in Honduras; and a review of methodological concerns regarding the
inclusion of gender in the initial stages of an A.I.D. participatory environment and natural resources project in St. Lucia and
Dominica.

2. For a recent LAC-spccific study, see Fsacharopoulos and Tzannatos 1992.

3. Consult the main bibliography for a fairly complete listing of such items, e.g., Jockes 1986, Joekes and Moayedi 1987, Kelly
1986, Nash and Safa 1985, Rodrigucz 1989, Tinker 1990.

4. Some economists, however, feel that free trade on a global basis is inherently destabilizing to all those involved and instead
are promoting 'managed trade' involving some degree of protectionism, fixed market shares, and reduced growth rates for
export industries but higher net receipts. See among others Hager 1984, and Singer, ct al. 1990 (Part 8).

5. For case studies on structural adjustment and gender in LAC countries, sec Bolles 1985 on Jamaica; CEPLAES 1990 on
Ecuador- Davies and Anderson 1987 on Jamaica; Decre, et al., 1990 on the Caribbean; del Carmen Feijoo and Jelin 1989 on
Argentina; Garcia and Gomiriz 1989 on Central America; Garcia and Oliveira 1991 and Oliveira and Garcia 1990 on Mexico;
Harris and Boyd 1988 on Jamaica; Moser 1989 on Ecuador; and Perez-Aleman 1991 on Nicaragua. For LAC or global
coverage, see Agarwal, et al. 1989; Berger 1990: Bonilla 1990b; Boyle 1988: Buvinic 1990: Collier 1989, 1990; Cornia. et
al. 1987; Elson 1988. 1989; Hood et al. 1988: INSTRAW 1985; Jockes 1991; Joekes, et al. 1988; MayaTech 1991; Mehra
1990; Rocha, et al. 1987; UNICEF 1987; UN 1988, 1991; and Vickers 1991. Additional references on SA (* indicates these
are found in the supplemental bibliography): Addison and Demerv 1985, 1987; Bchrman and Dolakikar 1989; Berry 1991;
Boyd 1987; Chapelierand Tabutabai 1989*; Colclough and Herbold 1988*; van der Hoeven 1987; OECD 1983*; Santiago 1991;
Scobie 1989; Syrquin 1986*; and Wldliamson 1990*.

6. In the LAC region, the gender gap in education is much lower than in other developing regions. 1985 statistics for the LAC
region indicate only a 2 percentage point gap between illiteracy rates for the total population and those for women (19% of
women are illiterate compared to 17% of the total population). Comparable figures for other developing regions show an 11-13
point lag for women. Similarly, by 1988, girls and boys had achieved near parity in primary school attendance for the LAC
region, with 98 girls attending for every 100 boys. The average for low and middle income countries in 1988 was 83/100. One
disturbing trend, however, has been the increase over time in the gender gap for the percent of cohort persisting to grade 4 in
the LAC region. In 1970. the gap was only 5 points (in favor of girls): 64% of girls continued to grade 4 but only 59% of boys.
By 1984, the gap increased to 11 percentage points: 75% of girls continued to grade 4 and 86% of boys (World Bank 1991:
204. 267).

7. See. e.g., Bonilla (1990b-216 ft.) for a summary of the literature on LAC; Folbre (1991) for a discussion of measurement
problems and current global trends; Buvinic (1990) for an analysis of 22 surveys of women-headed households: Altimir (1984)
on Chile. Colombia. Panama, and Venezuela; Bonilla and Vilez (1987) on Colombia; and Moser (1989) on Ecuador.

8. The 1968 version of the International Standard Industrial Classification (ISIC) codes allows for aggregate analysis of
economic activities. The nine major divisions are frequently grouped into 3 sectors: agriculture, industry and service. The
industrial sector, for example, includes 4 of the 9 divisions: miningiquarrying, including oil production; manufacturing;
electricity, gas, and water, and construction. These 9 major divisions are assigned a 1-digit code. Within the manufacturing
division (ISIC code 3), there are numerous subsectors, whereby manufacturing activities are categorized into groups and
subgroups to facilitate analysis of those activities. For example, at the 2 digit level, manufacturing includes food, beverages,
and tobacco (31), textiles, clothing and leather goods (32). woodiwood products (33), printing/publishing (34), chemnials (35),
and so on. Each of these two-digit groups is broken down further to 3 and 4 digits, with a greater level of specificity at each
level. A similar system is universally applied to occupations as well, using the International Standard Classification of
Occupations (ISCO) codes.












9. In Ecuador, for example, the government's household employment survey collects data for each member of the household
over the age of 5, and records their sex. However, the responsible government agency does not normally tabulate or report the
data by sex. The GENESYS project, through the LAC WID Research initiative, worked with the Centro de Planificacidn y
Estudios Sociales (CEPLAES) in Ecuador to obtain the tabulations and analvze the data for the period 1987-1991 (see Mauro
and Orriola 1992). Among the outputs are the gender composition of the industrial subsectors at the two-digit level, and an
analysis of differences in social security membership rates, methods of job search, hours of work. wages, migratory status, and
demographic variables, among other variables. One of the recommendations for further research that emerged from the report
was that qualitative research on the causes of wage discrimination is needed to supplement initial findings from the empirical
analysis.

10. Gender-disaggregated survey results for the rural province of Cochabamba in Bolivia are currently being analyzed, with
assistance from the GENESYS project. This survey will be duplicated nationwide in Bolivia within the next two years.

11. Problems in accounting for women's labor force participation rates include variations in the definition of economic activity,
flawed questionnaires in household surveys, unpaid and uncounted household and agricultural labor, and seasonal or temporary
employment. Subsequently, statistics showing female participation levels underestimate the substantial contributions that women
make to the economy and their households. A 1983 experimental population census in Costa Rica showed the limits of the
census in recording women's economic participation. When seasonal and temporary employment and work performed outside
the reference period were taken into -ccount, "the participation rate of rural women jumped from 22.5 percent to 45.3 percent
of the rural work force" (Buvinic 1990:2). Despite the limitations in the statistics, women represent an important part of the
labor force and their recorded participation rates during the 1980s increased every year in the region, with rare exceptions
(Haiti). For more information on accounting for female economic activity, see Dixon-Mueller and Anker 1988; Bonilla
1990 2:218; and UN 1991:81-100, 1990a:63-72, 1990b, 1989:313-358;.

12. In comparison with the ILO-based figures, data from household surveys place the participation rates for women in Central
America at 30% in 1988, and 70% for men (Garcia and Gomiriz 1989a), compared to 25% and 84% respectively (UN 1991).

13. The term maquila refers to production sharing programs or "in-bond" manufacturing schemes. These a- distinct from
export processing or free trade zones (EPZs), an alternative method of export promotion. Incentives to export through maquila
schemes are provided on a factory-by-actory basis, instead of being defined by a geographical zone" (Robbins 1991). Maquilas
are subject to special treatment, which may include: "import taxes on raw materials and intermediate goods are either
temporarily suspended under bond or other forms of guarantee" and "raw materials and intermediate inputs are temporarily free
of duty, under a bond or guarantee. When the final goods arc exported, the bond is cleared or canceled" (Robbins 1991:5).
Further, maquila firms may have more latitude in moving between domestic and international markets than do firms operating
in EPZs. which tend to face significant restrictions in selling to domestic markets ibidd).

14. Sectoral Emphasis of Invesmnen and the Distribution of Benefits. The decision about which sectors to target for increased
investment and for export promotion activities in most cases is based on economic factors, as it should be. Gender becomes
an issue for consideration after the decision is made, as the sectoral emphasis has implications for the distribution of benefits
across gender, and presumably, race, class, ethnicity and age in a given country.

Women in the LAC region may dominate the work force in certain industries (manufacturing subsectors, some
agribusiness) and men in others (fuel, minerals, and metals), as a result of various forms of discrimination and cultural factors.
Additionally, women's presence in some sectors may be significant but not well-documented they may be hired as temporary
or part-time labor, or are active only in certain parts of the production process, such as seasonal pest-harvest work in
agribusiness or "outwork' in the informal sector, and as such their employment may go unrecorded. While their levels of
participation, the subscctors in which they are employed, and the empirical evidence available, vary across and within countries
in the region, women currently ar a major part of the export oriented labor force in many places. The literature is not clear
on exactly how men and women's share has changed over time, although new evidence from the 1990 census data in the LAC
region will provide some answers in the next few years. Similarly, exactly how new trends of investment and export promotion
will affect men and women in the work force over the next ten years is not clear. For example, those countries experiencing
a surge in exports of manufactures, as a result of increased foreign investment or reduced barriers to trade, may very well
experience changes in the gender composition of the labor force.

What is clear is that an increase in manufactured exports is more likely to provide employment opportunities for women
than an increase in primary products. Table 1 in Annex A shows changes by subregion in the importance of manufactures,












which accounted for approximately 1/3 of ail manufactured exports in 1989. Although restrictive U.S. trade policy limits the
possibility of the textiles and clothing subsector to reach its full capacity, Table 8 in Annex A shows the share of textiles and
clothing as a percentage of merchandise exports for those countries where it constituted over : C% of the total. This subsector
has traditionally maintained high proportions of women in its labor force.

15. Feminization of the Labor Force Long and Short Term Trends. The effects of industrialization, and export promotion
in particular, on women and men's employment opportunities appear to change substantially over time. Studies have long
pointed to a feminization of the labor force when export promotion policies are introduced and firms start competing in the
international market. Cagatay and Berik explain the linkages between gender composition of the labor force and macroeconomic
policies as follows.

First. shifts in industrialization strategy imply changes in the incentive structures in an economy, which by
their effects on relative profitability and costs across sectors might affect gender composition of employment.
For example, giving incentives to export-oriaeted industries might spur the relative growth of such industries
and bring about a rise in aggregate female share of manufacturing employment, to the extent that women
are already concentrated in these industries. Secondly, shifts in industrialization strategy might be induced
by a balance of payments crisis and a structural adjustment program. In this case, the incomes policies that
accompany a structural adjustment program might again have implications ... by inducing more women to
enter paid employment. Thirdly, macroeconomic policy changes could also include changes in social policy
that roll back protective legislation for womer, as part of the reduction in labor standards in the economy.
This could make it more advantageous for employers to hire women, given their 1bwer wages' (1990:119).


Women's majority share of the work force in EPZs was the subject of numerous studies during the 1980s. Recent
research, however, is uncovering what may be a reversal in the long-run of the trend toward feminization. A study by Silvers
and Valencia (1990) of maquila workers in Sonora, Mexico confirmed a trend toward masculinization of the work force, in
support of recent findings reported by the Mexican government. In a sample of 400 employees from 32 factories, women
constituted 43% of the manufacturing workers, compared with 64% in 1975 and 56% in 1985. Silvers and Valencia suggest that
"changes in maquila industry composition and technology are said to be less dependent upcn women" and the number of
administrative positions held by Mexicans (as opposed to foreigners) may be increasing, with these jobs going to men (1990:23).
This suggests that long-run employment effects of export-led growth may be more evenly balanxd between men and women
than previously supposed, at least in terms of the numbers employed.

Evidence from Turkey, comparing female intensity cf the manufacturing labor force under an import-substitution
strategy and an export led strategy, also refutes, to some extent, the feminization theory: "successful export-orientation of the
economy has been achieved without a relative growth of women's employment in large-scale manufa-turing enterprises' ((aatay
and Berik 1990:129; the authors note that this conclusion must be qualified by the lack of data on outwork and other informal
activities, which, if available, might show a shift toward female labor). The authors suggest that "gender-typing of industries
is resistant to changes in cost structure and other incentives, especially when the cost advantage of women over male workers
is narrowed by repressive labor policies' (1990:119). Whether these results will be duplicated in the LAC region over time is
unknown, but gathering baseline data and dc'ng preliminary work to identify short term trends and determining characteristics
can help measure change and allow governments and firms to better pr.ipare for the future.

16. See MayaTech 1991.

17. Measuring Occupational Segregation. Several economic indices have been developed to measure occupational segregation
by sex, identifying who benefits from growth via increased employment and how those bencits are distributed. While such
measures are useful in analyses of formal-sector employment, they may be 'somewhat superfluous' when applied to the informal
sector, where differences in occupational skills, statuses, and incomes are less pronounced (Massiah 1988:219).

18. However, when this kind of analysis was applied to the nineteenth century French spinning and weaving industry,
researchers found that productivity differences, rather than statistical discrimination, determinecr the wage gap between women
and men. While women's wages were only 60% of men's in the industry, their marginal productivity also was only 56% of
men's and their production function was 65% of men's (HIID 1990).












19. The term "home work" or "outwork" as used by the ILO (1989:4) "combines the following criteria: (1) an implicit, explicit,
verbal or written employment agreement between the homeworker and the employer, subcontractor, agent or middleman; (2)
the work is performed outside the premises of the employer, either in the employee's home, a neighborhood workstation,
workshops or premises which do not belong to the employer- (3) the form of payment is usually by the piece or unit of
production; and (4) materials and tools are either owned by the homeworker or provided by the employer on loan or a hire-
purchase basis."

20. For more information on outwork, see Beneria and Roldan 1987; Benton 1989; Boris and Danieis 1987; de los Angeles
Crummett 1988; Freeman 1991; Roldan 1985; and Singh and Viitanen 1987. For more information on the informal sector,
see Bergerand BuviniC 1989; Bromley 1978; Castells and Portes 1989; Connolly 1985; Feldman 1988, 1991; Heyzer 1981; Hill
1983; Hoyman 1987; Mazumbar 1976; Mlinione 1983; Painter 1989; PADF 1986; Portes, et al. 1986. 1989; Scott 1979;
Sethuraman 1981; de Soto 1989; Souza and Tokman 1976; Tokman 1988, 1989 (in supplemental bibliography); UN 1990a;
Velez Valarezo 1989.

21. Small scale firms employing less than 10 persons have long been recognized as 'a significant and frequently dominant
component of the industrial sector," providing well over 50% of all industrial' r.nployment in developing countries (Liedholm
and Mead 1987:14).

22. Excerped from ILO 1989:11-13. Argentina, Peru and Uruguay "have adopted legislation specifically to regulate the terms
and conditions under which home work can be given out," while the 14 other LAC countries "devote a section of their labor
codes to home work." "Protective legislation applies to homeworkers in Brazil when an employment relationship is duly
established." Minimum wage legislation applies to homeworkers in 13 LAC countries: Argentina. Brazil. Colombia. Costa Rica,
Ecuador. Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, San Marino and Uruguay. Limitations on deductions that
employers are entitled to make from wages for defective work and spoilt materials are legislated in 9 LAC countries: Bolivia,
Costa Rica, Ecuador. Guatemala. Haiti, Honduras, Nicaragua, Paraguay and Peru. Eight countries mandate that wages for
homeworkers must be equal to wages paid to employees working in the firmienterprise: Costa Rica, El Salvador. Guatemala,
Haiti, Honduras. Mexico, Paraguay and Venezuela. Contracts 'setting out the terms and conditions of employment usually have
to be in writing (Costa Rica, El Salvador, Guatemala, Mexico and Panama) although Bolivia and Colombia honor a verbal
contract. Costa Rica, Ecuador, Mexico and Venezuela "explicitly exclude homeworkers from general legislation regarding the
hours of work," e.g., weekly totals and Sunday rest. In Guatemala, 'ten homeworkers working for the same employer have
the right to request the employer to organize premises where they can perform their work together. The employer is then obliged
to do so. and the homeworkers thereupon become factory workers." Both the Dominican Republic and Mexico "prohibit the
use of a middleman or intermediary."

23. In Peru, the dilemma of how to provide benefits without decreasing the demand for women's labor is solved by sharing
the cost of benefits among workers, employers and the state. Employers there, as opposed to other developing countries, do
not cite maternity benefits as a disincentive for hiring women (HIID 1990).










GLOSSARY OF TERMS'


absolute (cost) advantage If Country A can produce more of a commodity with the same amount
of real resources than Country B (i.e, at a lower absolute unit cost). Country A is said to
have absolute cost advantage over Country B. See also comparative advantage.
capital See human and physical capital.
capital-intensive technique A more capital-using process of production; that is, one using a higher
proportion of capital relative to other factors of production, such as labor or land per unit
output.
cash crops Crops produced entirely for the market (e.g., coffee, tea, cocoa. cotton. rubber,
pyrethrum, jute, wheat).
casual employment Employment on an ad hoc basis without regular hours or a wage contract;
constitutes employment in the informal sector.
commercial policy Policy encompassing instruments of "trade protection" employed by countries to
foster industrial promotion, export diversification, employment creation, and other desired
development-oriented strategies. They include tariffs, physical quotas, and subsidies.
comparative advantage A country has a comparative advantage over another if in producing a
commodity it can do so at a relatively lower opportunity cost in terms of the foregone
alternative commodities that could be produced. Taking two countries, A and B, each
producing two commodities, X and Y, Country A is also said to have comparative advantage
in the production of X if its absolute advantage margin is greater or its absolute disadvantage
is less in X than in Y.
cost-benefit analysis A basic tool of economic analysis in which the actual and potential costs (both
private and social) of various economic decisions are weighed against actual and potential
private and social benefits. Those decisions or projects yielding the highest benefit/cost ratio
are usually thought to be most desirable.
development The process of improving the quality of all human lives. Three equally important
aspects of development are: (1) raising people's living levels, i.e., their incomes and
consumption levels of food, medical services, education, etc., through "relevant" economic
growth processes; (2) creating conditions conducive to growth of people's self-esteem through
the establishment of social, political, and economic systems and institutions which promote
human dignity and respect; and (3) increasing people's freedom to choose by enlarging the
range of their choice variables, e.g., increasing varieties of consumer goods and services.
ECLAC (Economic Commission for Latin America and the Caribbean) A regional branch of the
United Nations system located in Santiago, Chile, and devoted to the regular publication of
technical and statistical analyses of economic trends in Latin America and the Caribbean as
a whole and in individual Latin American and Caribbean nations.
economic growth The steady process by which the productive capacity of the economy is increased
over time to bring about rising levels of national income.
economic infrastructure The underlying amount of capital accumulation embodied in roads, railways,
waterways, airways. and other forms of transportation and communication plus water supplies,
financial institutions, electricity, and public services such as health and education. The level
of infrastructural development in a country is a crucial factor determining the pace and
diversity of economic development.


Excerpted, with additions by the GENESYS authors, from Michael P. Todaro. Economic
Development in the Third World, 4th edition (New York: Longman, 1990).

1









economic policy Statement of objectives and the methods of achieving these objectives (policy
instruments) by government, political party, business concern, etc. Some examples of
government economic objectives are maintaining full employment, achieving a high rate of
economic: growth, reducing income and regional development inequalities, maintaining price
stability. Policy instruments include fiscal policy, monetary and financial policy, and legislative
controls (e.g., price and wage control, rent control).
efficiency, economic Producing the maximum-valued output possible, using cost-minimizing
techniques of production and considering effective market demand.
efficiency, technical Producing the maximum output possible, given quantities of inputs and existing
technology, without regard :. effective market demand.
export processing zones (EPZs) ,-e maquila. EPZs are one way of promoting exports, whereby
firms locate in specific geographic locations, e.g., industrial parks, for the primary purpose of
producing export goods and are frequently given special treatment by the government
export incentives Public subsidies, tax rebates, and other kinds of financial and nonfinancial measures
designed to promote a greater level of economic activity in export industries.
export promotion Purposeful governmental efforts to expand the volume of a country's exports
through export incentives and other means in order to generate more foreign exchange and
improve the current account of its balance of payments.
exports (of goods and nonfactor services) Represent the value of all goods and nonfactor services
sold to the rest of the world; they include merchandise, freight, insurance, travel, and other
nonfactor services. The value of factor services (such as investment receipts and workers'
remittances from abroad) is excluded from this measure.
factors of production Resources or inputs required to produce a good or service. Basic categories
of factors of production are land, labor and capital.
free trade Trade in which goods can be imported and exported without any barriers in the form of
tariffs, physical quotas, or any other kind of restriction.
human capital Productive investments embodied in human persons. These include skills, abilities,
ideals, health, etc., that result from expenditures on education, on-the-job training programs,
and medical care. See also physical capital.
ILO (International Labor Organization) One of the United National functional organizations based
in Geneva whose central task is to look into problems of world manpower supply, its training,
utilization, domestic and international distribution, etc. Its aim in this endeavor is to increase
"world output" through maximum utilization of available human resources and thus improve
levels of living for people.
import substitution A deliberate effort to replace major consumer imports by promoting the
emergence and expansion of domestic industries such as textiles, shoes, household appliances.
Requires the imposition of protective tariffs and physical quotas to get the new industry
started.
industrialization The process of building up a country's capacity to "process" raw materials and to
manufacture goods for consumption or further production.
inflation A period of above-normal general price increases s reflected, for example, in the consumer
and wholesale price indexes. More generally, the phenomenon of rising prices.
informal sector That part of the urban economy of developing countries characterized by small
competitive individual or family firms, petty retail trade and services, labor-intensive methods
of doing things, free entry and market-determined factor and product prices. It often
provides a major source of urban employment and economic activity.



P



4..
J









investment That part of national income or expenditure devoted to the production of capital goods
over a given period of time. "Gross" investment refers to the total expenditure on new capital
goods. while "net" investment refers to the additional capital goods produced in excess of
those that wear out and need to be replaced.
inward-looking development policies Policies that stress economic self-reliance on the part of
developing countries, including the development of indigenous "appropriate" technology, the
imposition of substantial protective tariffs, and nontariff trade barriers in order to promote
import substitution, and the general discouragement of private foreign investment
labor force Describes economically active persons, including the armed forces and the unemployed,
but excluding housewives, students and economically native groups.
labor-intensive technique Method of production that uses proportionately more labor relative to
other factors of production.
labor productivity The level of output per unit of labor input, usually measured as output per man-
hour or man-year.
macroeconomics That branch of economics which considers the relationships among broad economic
aggregates such as national income, total volumes of saving, investment, consumption
expenditure, employment, money supply, etc. It is also concerned with determinants of the
magnitudes of these aggregates and their rates of change through time.
maquila The term maquila refers to production sharing programs or "in-bond" manufacturing
schemes. These are distinct from export processing or free trade zones (EPZs), an alternative
method of export promotion. Incentives to export through maquila schemes are provided on
a factory-by-factory basis, instead of being defined by a geographical "zone" (Robbins 1991).
Maquilas are subject to special treatment, which may include: "import taxes on raw materials
and intermediate goods are either temporarily suspended under bond or other forms of
guarantee" and "raw materials and intermediate inputs are temporarily free of duty, under a
bond or guarantee. When the final goods are exported, the bond is cleared or canceled"
(Robbins 1991:5). Further, maquila firms may have more latitude in moving between
domestic and international markets than do firms operating in EPZs, which tend to face
significant restrictions in selling to domestic markets ibidd).
microeconomics That branch of economics concerned with individual decision units firms and
households -- and the way in which their decisions interact to determine relative prices of
goods and factors of production and how much of these will be bought and sold. The market
is the central concept in microeconomics.
multinational corporation (MNC) An international or transnational corporation with headquarters
in one country but branch offices in a wide range of both developed and developing countries.
Examples include General Motors. Coca-Cola. Firestone. Philips, Renault, British Petroleum.
Exxon, ITT.
noneconomic variables Elements of interest to economists in their work but which are not given a
monetary value or expressed in numerals because of their intangible nature. Examples of
these include beliefs, values, attitudes, norms, and power structure. Sometimes noneconomic
variables are more important than the quantifiable economic variables in promoting
development.
nontariff" trade barrier Barriers to free trade that take forms other than tariffs, such as quotas,
sanitary requirements for imported meats and dairy products.
occupational segregation The reservation of jobs primarily for one group to the exclusion of others,
based on sex or race, for example. It is one common form of labor market discrimination.




\


1, -









open economy An economy that encourages foreign trade and has extensive financial and
nonfinancial contracts with the rest of the world, e.g., in areas such as education, culture,
technology. See also outward-looking development policies.
opportunity cost In production, the real value of resources used in the most desirable alternative,
e.g., the opportunity cost of producing an extra unit of manufactured goods is the output of,
say, food that must be forgone as a result of transferring resources from agricultural to
manufacturing activities; in consumption, the amount of one commodity that must be forgone
in order to consume more of another.
outward-looking development policies Policies that encourage free trade, the free movement of
capital. workers, enterprises, and students, a welcome to multinational companies, and an
open system of communications. See also open economy.
outwork The term "home work" or "outwork" as used by the ILO (1989:4) "combines the
following criteria: (1) an implicit, explicit, verbal or written employment agreement between
the homeworker and the employer, subcontractor, agent or middleman; (2) the work is
performed outside the premises of the employer, either in the employee's home, a
neighborhood workstation, workshops or premises which dc not belong to the employer, (3)
the form of payment is usually by the piece or unit of production: and (4) materials and tools
are either owned by the homeworker or provided by the employer on loan or a hire-purchase
basis."
physical capital Tangible investment goods (e.g., plant and equipment, machinery, building). See
also human capital.
Prebisch-Singer hypothesis Argument that primary product export orientation of developing
countries results in secular decline in their terms of trade.
primary industrial sector That part of the economy which specializes in the production of
agricultural products and the extraction of raw materials. Major industries in this sector
include mining, agriculture, forestry, and fishing.
private benefits Gains that accrue to a single individual e.g., profits received by an individual firm.
See also social benefits.
private costs The direct monetary outlays or costs of an individual economic unit; e.g., the private
costs of a firm are the direct outlays on fixed and variable inputs of production.
private foreign investment The investment of private foreign funds in the economy of a developing
nation, usually in the form of import substituting industries by multinational corporations.
private sector That part of an economy whose activities are under the control and direction of
nongovernmental economic units such as households or firms. Each economic unit owns its
own resources and uses them mainly to maximize its own well-being.
privatization Preponderance of private ownership of means of production. Selling public assets
(corporations) to private business interests. See state-owned enterprises.
production technique Method of combining inputs to produce required output A production
technique is said to be appropriate ("best") if it produces a given output with the least cost
(thus being economically efficient) or with the least possible quantity of real resources
(technically efficient). A technique may be labor intensive or capital intensive.
public sector That portion of an economy whose activities (economic or noneconomic) are under
the control and direction of the state. The state owns all resources in this sector and uses
them to achieve whatever goals it may have e.g., to promote the economic welfare of the
ruling elite or to maximize the well-being of society as a whole. See also private sector.
recession A period of slack general economic activity as reflected in rising unemployment and excess
productive capacity in a broad spectrum of industries.




"x.









research and development (R&D) A scientific investigation with a view toward improving the
existing quality of human life, products, profits, factors of production. or just plain knowledge.
There are two categories of R&D: (a) basic R&D (without a specific commercial objective)
and (b) applied R&D (with a commercial objective).
resources, physical and human Factors of production used to produce goods and services to satisfy
wants. Land and capital are frequently referred to as physical resources and labor as the
human resource.
secondary industrial sector The manufacturing portion of the economy that uses raw materials and
intermediate products to produce final goods or other intermediate products. Industries such
as motor assembly. textiles, and building and construction are part of this sector.
sectoral segregation The reservation of jobs in an economic (sub)sector primarily for one group to
the exclusion of others, based on sex or race, for example. An example is the practice of
hiring disproportionate numbers of women over men in the textile industry or services, or
disproportionate numbers of men over women in engineering, construction and finance.
self-esteem (of a society) Feeling of "human worthiness" that a society enjoys when its social, political
and economic systems and institutions promote human respect, dignity, integrity, self-
determination, etc. See development.
services Comprises economic activity other than industry and primary goods production.
"skewed" distribution of income Skewness is a lack of symmetry in a "frequency distribution." If
income is perfectly distributed such a distribution is said to be symmetrical. A skewed
distribution of income is one diverging from perfect equality. Highly skewed distribution of
income occurs in situations where the rich persons, say the top 20% of the total population,
receive more than half of the total national income.
small-scale industry An industry whose firms or farms operate with small-sized plants, low
employment, and hence small output capacity. Economies of scaie do not normally exist for
such firms or farms but they often tend to utilize their limited physical, human and financial
capital more efficiently than many large-size firms or farms.
social benefits Gains or benefits that accrue or are available to the society as a whole rather than
solely to a private individual e.g., the protection and security provided by the police or the
armed forces, the external economies afforded by an effective health delivery system, and the
widespread benefits of a literate population. See private benefits.
social cost The cost to society as a whole of an economic decision, whether private or public.
Where there exist external diseconomies of production (e.g., pollution) or consumption
(alcoholism), social costs will normally exceed private costs and decisions based solely on
private calculation will lead to misallocation of resources.
stabilization policies A coordinated set of mostly restrictive fiscal and monetary policies aimed at
reducing inflation, cutting budget deficits, and improving the balance of payments.
state-owned enterprises Public corporations and para-state agencies (e.g., agricultural marketing
boards) owned and operated by the government.
structural adjustment loans Loans by the World Bank designed to foster structural adjustment in
the developing countries by supporting measures to remove excessive governmental controls.
getting factor and product prices to better reflect scarcity values and promoting market
competition.
subsidy A payment by the government to producers or distributors in an industry to prevent the
decline of that industry (e.g.. as a result of continuous unprofitable operations) or an increase
in the prices of the its products, or simply to encourage it to hire more labor (as in the case
of a wage subsidy). Examples of subsides are export subsidies to encourage the sale of
exports, subsidies on some foodstuffs to keep down the cost of living especially in urban areas,










farm subsidies to encourage expansion of farm production and achieve self-reliance in food
production.
tariff (ad valorem) A fixed percentage tax (e.g., 30%) on the value of an imported commodity levied
at the point of entry into the importing country.
technical assistance Foreign aid (either bilateral or multilateral) that takes the form of the transfer
of expert personnel, technicians, scientists, educators, economic advisors, consultants. etc.,
rather than a simple transfer of funds.
trade (as an engine of growth) Free trade has often been described as an "engine of growth" because
it encourages countries to specialize in activities in which they have comparative advantages
thereby increasing their respective production efficiencies and hence their total outputs of
goods and services.
underemployment A situation in which persons are working less, either daily, weekly, monthly, or
seasonally, than they would like to work.
unit cost The average total cost per unit of outpu: of any economic good or service.
vicious circle A self-reinforcing situation in which there are factors that tend to perpetuate a certain
undesirable phenomenon -- e.g., low incomes in poor countries lead to low consumption
which then leads to poor health and low labor productivity and eventually to the persistence
of poverr'.
wage discrimination Economic (market) discrimination reflected in the structure of wages, such that
there are earnings differentials between workers who are homogenous except in terms of
race, sex. ethnicity, etc. These differentials "imply that the market has accorded a value to
personal charactelistics that are unrelated to productivity" (Rima 1981:200).





























6




/-^

















ANNTEX A: Data Tables














































/













Table 1: Structure of Merchandise Exports (1965. 1989)


Primary
Commodities Manufactures

1965 1989 1965 1989

LAC Region 93% 67% 7% 33%

South Amenca/Memco 94 78 6 22

Central America 90 83 10 17

Caribbean 84 39 16 61

Note: averaged across countries within each region
Source: World Bank 1991:234.




Table 2: Labor Force Participation (LFP) Rates by Gender (1990)


Women


Men


S. America/Mexco 27% 80%

Central America 25 84

Caribbean 47 77


Note: Unweighted averages across countries
Source: UN 1991







Table 3: Women's LFP Rates by Age Group (early-mid 1980s)


< 20
YCearI


20-59
years


60+
years


S. America/Mexico 11% 33% 10%

Central America 12 24 7

Caribbean 6 48 10

Note: ILO data, uneighted averages across countries
Source: Fsacharopoulos and Tzannatos 1992:3


"-I












Table 4: Labor Force Share by Gender (1990)


Women Men

S. America/Mexao 26% 74%

Central America 23 77

Caribbean 37 63


Note: Unweighted averages across countries
Source: UN 1991.




Table 5: Unemployment Rates & Shares by Gender (mid-1980s)


Select Countnes


Unemployment Rates
Women Men Total


Women


Share of Unemployed


Men Total


S. America/Mexico 9% 8% % ---
Argentna 45% 55% 100%
Bolivia 15 85 100
Brazil 5.9 6.6 6.4 38 62 100
Colombia 57 43 100
Chile 9.7 8.4 8.8 35 65 100
Peru 53 47 100
Uruguay 12.6 6.7 9.1 56 44 100
Venezuela 72 9.9 9.1 22 78 100

Central America 10% 6% 7% -
Costa Rica 7.9 4.7 5.6 39 61 100
El Salvador 24.4 12.4 17 -
Guatemala 5.7 28 3.5 36 64 100
Honduras 8.6 7.1 7.6 17 83 100
Nicaragua 2.9 1.7 2. -

Caribbean 26% 16% 16% -
Bahamas 15 9.7 12.2 58 42 100
Barbados 23.1 13 17.9 61 39 100
D.R. (rural) 29 21 -- -
Guiana 48 52 100
Jamaica 33.8 14.9 23.6 66 34 100
Marinique 63 37 100
Neth. Antilles 31.3 15.9 222 58 42 i00
S:.Pierre/Mijue. 42 58 100
Suriname 46 54 100
TrinidadTobago 253 20.7 223 38 62 100
___ ___id__a__/Toib_ __go_


Sources: Deere et aL 1990:20. 52-55: Garcia and Gomarin 1989a:445-46;
Henry 1988: 191, 193: Rodgers 1989:52,- Sckmiarroth 1991:398-99.



A-2


"7












Table 6: Sectoral Distribution of the Labor Force (1980)


South AmencaiMexico


Women Men total


Central Amrenca


Women


Men total


Caribbean


Women Men total


Agnculture 11% 35% 30% 7% 54% 45% 20% 39% 33%

Industry 19 27 25 19 18 18 13 26 20
-----_ i i I-I
Services 69 38 46 74 27 37 67 35 47

Total 99 100 101 100 99 100 100 100 100

Note: Totals difer from 100 due to rounding
error; unreighted averages across countries
Source: Bonilla 1990b:224-25


Table 7: Sectoral Distribution of the Labor Force in Central America (1985-87)


Women


Men


Agencuiture 11% 49%

industry 21 21

Services 68 30

Total 100 100

Note: From surveys covering Costa Rica, El Salvador,
Guatemala, Honduras and Nicaragua
Source: Garcia and Gomdriz 1989a:442


A-3













Table 8: Textiles and Clothing as a Share of Merchandise Exports (1965. 1989)


1965 1989

South America/Mexco
Uruguay 2% 14%

Central America
Cosa Rica 2 18
El Salvador 6 11
Guatemala 4 11

Caribbean
Dominican Republic 0 35
Haiti 3 43
Jamaica 4 13

Note: Only those countries where texiles and clothing
constituted over 10% of merchandise exports in 1989
Source: World Bank 1991:234.


Table 9: Occupational Distribution of the Labor Force (mid-1980s) (percent)


Venc- Casta Guare- Nicar- El
Barbados Chile zuela Rica mala agua Salvador

_______ _FMFMLFMFM FM.FMiFM
F M F M F M F M F M F M F F M

ProT'echJRelated 112 8.7 13.1 4.6 21.6 6.6 14.8 6.5 7.6 10 7.5

Admin./Managerial 2.7 5. 1.9 3.7 20 5.0 2.7 3.6 1.9 0.1 0.1 --

Clencal/Related 252 115 16.5 9.5 20.8 5.3 103 7.0

Sa les 11.2 73 163 11.4 142 135 26.0 153 31.0 215 32.5 -

Servces 27.2 15.8 30.2 5.0 28.3 8.8 31.2 73 25.0 27.8 20.7

Agncultural/Related 65 7.1 2.9 2I.8 1.7 21.4 4.7 35.8 14 10S 12.1 -

Production/Related 16 44.4 19.0 42.4 112 38.2 20.6 31.5 20.0 193 19.6

Other 0.1 1.6 0.1 0.6 -

Total 100 100 100 100 100 1100 00 100 100 100 -- 100

Note: ** Costa Rica and Guatemala grouped clercal and sales workers together
Sources: Garcia and Gomdriz 1989a, UN. 1989






A-4











Table 10: Share of the Labor Force Employed in the Informal Sector (mid-1980s)


% of all
Men


% of all
Wormen


Total


Cbile (1980) 22% 40% 28%

Costa Rica (1983) 23 -

El Salvador (San 20 33 -
Salvador, 1986)

Nicaragua (1985) 49 57 -

Panama (1983) 31 29 -

Brazil (urban 1983) 35

Bolivia (La Paz 1983) 48

Peru (Lima 1987) 45

Sources: Bonilla 1990b. Gdlvez and Todaro 190, Garcia and Gomdriz 1939, Jaroba 1989







































A5
















ANNEX B: Selected Statistics on Women and Men in LAC












Table la: Select Development Indicators SOUTH AMERICA AND MEXICO



Females per 100 Males

Life Labor Force Parliament Education
Expectancy
Primary Secondary

Country 1990 1988 1988 1988

Argentina 110.0 27 5 .. 172

Bolivia 108.9 49 3 87

Brazl 108.6 39 6

Chile 1103 29 .. 96 106

Colombia 108.8 52 .100 99

Ecuador 106.6 26 1 96 91

Guayana 109.2 27

Meaco 110.0 30 12 94 89

Paraguay 106.6 62 2 93 99

Peru 1063 49 6

Uruguav 109.4 45 0 95

Venezuela 109.2 27 4 96 119

Source: World Bank 1991 and UNDP 1991











Table Ib: Select Development Indicators CENTRAL AMERICA


Females per 100 Males

Life Labor Parliament Education
Expectancy Force
Primary Secondary

Country 1990 1988 1988 1988

Belize .. 49

Costa Rica 106.4 27 14 94 103

El Salvador 111.0 33 3 102 92

Guatemala 107.9 19 8 82

Honduras 106.7 22 5 100

Nicaragua 104.4 27 16 107 168

Panama 105.8 37 6 92 105

Source: World Bank 1991 and UNDP 1991






Table Ic Select Development Indicators THE CARIBBE4N



Females per 100 Males

Life Labor Parliament Education
Expectancy Force
Primary Secondary

Country 1990 1988 1988 1988

Barbados 106.9 89

Dominican Republic 106.6 17 5 162

Halti 106.2 51

Jamaica 1062 45 13 97

Trinidad and Tobago 1073 38 20

Source: World Bank 1991 ard UNDP 1991








B-2












Table 2a: Labor Force Participation (LFP) Rates (%) SOUTH AMERICA AND MEXICO



ILO Projectiors' Survey/Census Results or
Official Estimates"

Country Year Men Women Year Men Women

Argentina 1990 75 28 1989 55.4 21.0

Bolivia 1990 83 27 1990 48.1 14.6
Brazil 1990 81 30 1988 57.1 29.7

Chile 1990 75 29 1990 51.6 223

Colombia 1990 79 22 1990 53.9 33.2

Ecuador 1990 82 19 1990 47.2 20.5

Guavana 1990 84 28 1990 50.4 33.8

Mexco 1990 82 30 1988 51.2 22.8

Paraguay 1990 88 23 1990 56.0 35.1

Peru 1990 79 25 1989 51.2 33.1

Uruguay 1990 75 32 1985'" 67.6 28.2

Venezuela 1990 81 31 1988 50.0 19.8

Source: UN 1991, ILO 1991", and UNECLAC 1991-




Table 2b: Labor Force Participation (LFP) Rates (%) CENTRAL AMERICA


ILO Pr sections


Survey/Census Results or
Offcial Estimates"


Country Year Men Women Year Men Women

Costa Rica 1990 24 1990 54.6 21.6

El Salvador 1990 86 29 1990 50.7 34.7

Guatemala 1990 84 16 1989 50.8 16.7

Honduras 1990 86 21 1985"' 745 15.6

Nicaragua 1990 83 28 1990 47.1 22.4

Panama 1990 79 30 1985'" 67.1 25.4

Source: UN 1991' ILO 1991", and UNECLAC 1991"



B-3


- '












Table 2c Labor Force Participation (LFP) Rates (%) THE CARIBBEAN



ILO Projecions' SurveyvCensus Results or
Official Estimates"

Country Year Men Women Year Men Women

Barbados 1990 78 61 1985" 68.4 55.4

Cuba 1990 74 36 1988 55.4 31.7

Dominican Rep. 1990 85 15 1985"* 70.7 113

Guadeloupe 1990 73 53 -

Haiti 1990 83 56 1990 503 323

Jamaica 1990 83 68 1988 44.1 31.0

Martnique 1990 73 52 -

Neth. Antiles 1990 67 44 -

TrinidadrTobago 1990 81 34 1989 48.9 27.3

Source: UN 1991, ILO 1991", and UNECLAC 1991"




































B-4


1














Table 3a: Sectoral Distribution of the Labor Force (%) SOUTH AMERICA AND MEXICO



Country Year Total Men Women
(% of male LF) (% of female LF

Agr. ind. Ser. g. Ind. Ser. Ar ind. Ser.
Argentina 1970 16.0 343 49.7 19.9 37.7 42.4 43 24.0 71.7

1980 13.1 338 532 16.7 39.6 43.8 3.1 183 78.7

Bolivia 1970 52.1 20.0 27.9 59.0 19.5 21.5 26.8 21.9 513

1980 46.5 19.7 33.9 52.0 20.6 275 27.5 165 56.1

Brazil 1970 44.9 21.8 333 51.8 225 25.7 20.1 19.2 60.7

1980 31.2 26.6 423 37.0 29.4 33.6 153 19.0 65.7

Chile 1970 23.2 28.7 48.2 29.2 302 40.7 2.5 23.4 74.2

1980 165 25.2 58.4 21.8 28.4 49.9 23 16.4 813

Colombia 1970 393 233 37.4 48.0 23.7 283 7.0 21.9 71.1

1980 343 235 423 42.7 242 33.1 5.0 21.0 74.0

Ecuador 1970 50.6 205 28.9 57.6 19.6 22.8 14.6 25.0 605

1980 38.6 19.9 41.6 44.7 203 35.0 12.8 18.0 692

Guaana 1970 31.9 285 39.6 35.9 32.1 32.1 16.9 15.0 502

1980 26.8 25.8 47.4 31.6 28.9 395 11.8 163 720

Menco 1970 44.1 243 31.6 48.0 25.0 27.0 26.1 20.9 53.0

1980 36.6 29.0 345 42.9 29.4 27.7 193 27.9 52.8

Paraguay 1970 52.6 202 27.2 63.0 17.0 20.1 14.2 32.3 53.6

1980 48.6 20.6 30.9 58.0 195 225 125 245 63.1

Peru 1970 47.1 17.6 35.4 533 17.6 29.1 22.8 17.4 59.9

1980 40.1 183 41.7 45.1 19.8 35.2 24.4 135 62.2

Sunname 1970 24.8 20.9 54.4 25.0 25.0 50.0 24.0 8.7 673

1980 19.0 19.8 603 20.0 24.0 56.0 19.7 9.0 713

Uruguav 1970 18.6 29.1 523 24.0 30.7 45.4 35 24.7 71.9

1980 15.8 29.2 55.1 21.2 31.7 47.2 2.9 23.1 74.1

Veneziuea 1970 26.0 24.8 493 31.7 26.8 415 4.0 173 78.8

1980 16.1 28.4 55.6 20.7 31.9 475 2.6 18.4 79.1

Source: Borjila 1990b









B-5





\j,













Table 3b: Sectoral Distribution of the Labor Force CENTRAL AMERICA


County Year Total Men Women
(% of male LF) (% of female LF)

SInd. Ser. A. ind. Ser. Ar. ind. Ser.

Costa Rica 1970 42.6 20.0 37.5 51.0 20.5 28.6 4.4 17.8 77.9

1980 308 23.2 46.1 38.0 24.0 380 4.0 20.0 76.0

El Salvador 1970 56.0 14.4 29.6 69.0 13.4 17.6 52 18.4 76.5

1980 43.2 19.4 37.5 553 19.8 24.4 5.0 182 76.8

Guatemala 1970 613 17.1 21.7 69.0 16.2 14.8 10.4 22.5 67.1

1980 56.9 17.1 26.1 645 16.0 19.0 9.4 20.0 70.6

Hooduras 1970 64.9 14.1 21.0 74.6 12.1 13.4 6.7 263 67.0

1980 60.5 16.2 23.4 70.4 13.6 16.1 73 302 625

Nicaragua 1970 51.6 15.5 33.0 62.2 153 226 83 163 75.5

1980 46.6 15.8 37.7 57.2 16.0 26.8 8.0 15.0 77.0

Panama 1970 41.6 17.6 40.9 52.6 18.9 28.6 92 13.5 77.4

1980 31.8 18.2 50.2 40.2 20.9 39.0 8.0 10.5 81.6

Source: Bondla 19906


Table 3c Sectoral Distribution of the Labor Force THE CARIBBEAN




Country Year Total Men Women

r. Ind. Ser.S Ar-. Ind. Ser. A. !nd. Ser.

Barbados 1970 18.2 26.1 55.8 19.6 33.2 47.2 16.0 15.4 68.6

i980 9.9 20.9 693 10.2 23.5 663 9.5 180 725
Dominican Rep. 1970 54.8 14.2 31.1 60.2 14.5 25.4 10.5 11.9 77.7

1980 45.7 15.5 38.9 51.1 16.6 32.4 7.8 7.6 84.6

Hailt 1970 74.4 7.1 18.5 843 6.8 9.0 63.0 7.6 29.5

1980 70.0 8.3 21.8 79.0 8.4 12.6 58.5 8.1 33.4

Jamaica 1970 33.2 18.1 48S 44.0 24.0 32.0 18.6 10.0 715

1980 313 16.4 523 42.4 2.9 34.7 182 8.8 73.0

Trinidad/Tobag. 1970 18.6 35.2 46.2 19.4 42.1 38.5 16.7 18.8 64.6

1980 102 38.6 513 11.9 453 42.8 5.9 21.9 723

Source: Bonilla 1990b


B-6








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