Technology-intensive Trade and Gender Inequality-Emerging Country Perspective

Abstract

Purpose: This study examines how technology intensity in international trade affects gender inequality in labor force participation and wage in emerging economies. Methodology: The study decomposes the export and import into four sectors as High tech (HT), Medium tech (MT), low tech (LT), and primary products (PP) based on technology intensity. It then examines the long-run and short-run relationship using panel ARDL method and direction of casualty between the trade of these sectors and gender inequality in labor market using vector error correction model (VECM) based Granger causality test. Findings: The analysis results suggest that export and import in any sectors classified based on technology intensity such as high tech, low tech, medium-tech, and PP reduces gender inequality in labor force participation and wage. The results also suggest significant long-run bidirectional causality between TC and FLFPR and LFP inequality except for very few cases. On the other hand, trade-in any sector causes gender wage inequality in the short-run only, whereas, in the long run, gender wage inequality results in trade in different sectors. Limitations: The study has some limitations. Firstly, the unavailability of trade data for several emerging countries makes the analysis a little bit weak. Secondly, the female labor force participation data is not also totally structured. Thirdly, there is a considerable lack of structured and consistent gender wage gap data that makes the analysis questionable. Finally, the availability of consistent data in all aspects will make the study more reliable and robust. Practical Implication: This study will open a new window in the trade-gender inequality research field and help formulate policies in this field to use trade as an instrument to reduce gender inequality. Originality: This study analyses trade and gender inequality in labor force participation linkage from a different perspective. The study identifies the effects of trade classified based on technology intensity on female labor force participation and wage, which is a unique approach in this research field of trade-gender nexus