Transcript Modeling Gender Dimensions of the Impact of Economic

Modeling Gender Effects of Pakistan’s
Trade Liberalization
Rizwana Siddiqui
Pakistan Institute of Development Economics
1
Outline
Introduction
Methodology – Gender Sensitive CGE
Data - Gender Sensitive SAM
Simulation Results
Conclusion
2
Introduction
Gender Inequalities in Pakistan
women are
–
–
–
–
–
–
–
–
–
Less fed
Low health status
Less educated
Less mobile
Located in low paid jobs
Wage rate is low
Market work under estimated
Household work is completely ignored
Over loaded by Work
3
cont….
• Bias in Intrahousehold Allocation of Resources
• Bias in Division of Labour
Constraints Men and Women Face Differ
4
Policy Effects
Trade Liberalization and Gender Effects
– Change in structure of employment and prices
• Time Allocation
• Consumption
• Incidence of poverty- time, capability, income
5
Objective
The objective of the present study is to
measure gender dimensions of effects of
Trade Liberalization in Pakistan using a
comprehensive frame work that takes into
account:
– Market work, household work, leisure
– Men and Women Labour
– Consumption of men and women
Measure effects using gender based poverty
6
indicators
Development of Gender Aware
CGE
1. Production – Integrate market and non-market
sectors
2. Labour by gender
3. Rigidities
4. Consumption by Gender
5. Poverty Indicators by Gender
7
DATA
Construction of Gender SAM
1. Traditional SAM-based on market economy
2. Integration of Market Economy and Household
Economy
3. Female Participation Adjusted with new data
4. SNA Classification is used to Categorize
market, household, and leisure
5. Evaluation of Non Market Work—Opportunity
cost of labor
8
Assumptions
All activities are separable
Minimum time required for self care is 10Hours/d
Rest of the hours/d are distributed between
Market, Household and Leisure activities
Households Produced Goods are consumed by
Households themselves
9
Structure of SAM-1990
Market Sector (20)—Agriculture (5) , Industry ( 9)
Services ( 7)
Non Market Sectors(18)— Nine categories of
households are identified with nine social
reproduction sectors and nine leisure sectors
Factors of Production—Labor (8)—Grouped by
Gender and education
—Capital By Sector
Households(9)—4 Urban by education level of hh and 5
Rural by Gender and then male head hh by
employment status.
10
Salient Features of Gender SAM
1. It makes invisibility of women's
household work visible.
2. Hidden market work: Improved
female participation- female
participation in the market is over 50
% instead of 12%
3. Female labour increases from 3.1
million (OLD) to about 15 million
11
Female Labour Force Participation Rate (based on
old and new data collection techniques)
FLFPR (%)
50
40
30
20
10
0
1
2
3
years
Series1
Series2
12
Time Allocation between market and
non market activities
Women
Men
Urban
• Market – 26.5 to 40 %
• Household- 34.1 to 45.3%
• Leisure- 10 to 20 %
Urban
• Market – 50.6 to 57.4%
• Household- 2.9 to10.7 %
• Leisure- about 40%
Rural
• Market-34.1 to 45.3 %
• Households-35.9 to 47.3%
• Leisure-10 to 20%
Rural
• Market- 47.5 to 53.3%
• Households-1.6 to 16.8%
• Leisure-about 40 %
13
Time allocation by Gender in Market Economy
Male Labour in hours
Sectors
Female labour in hours
NoLowMedHighNo
Low
MedHigh
Education Education Educatio Educatio Education Education Educatio Educatio
n
n
n
n
Crop*
39.5
21.3
21.8
7.9
66.2
55.5
51.9
0.0
Live
Stock
11.5
6.5
5.9
1.8
10.0
11.2
6.5
0.0
Textile
6.3
6.5
7.9
3.9
9.5
18.6
19.7
27.0
Machinery
1.8
4.3
3.4
2.0
0.0
0.0
0.0
0.5
Public
Administra
tion**
8.0
13.2
16.8
31.5
4.3
0.0
0.3
13.3
Education
and
Health**
1.4
2.3
4.3
13.5
1.3
0.0
0.9
26.7
14
Household Reciepts by Source and Poverty
Employer
Other
SelfEmployed
FemaleHeaded
Households
Employee
High
Education
Medium
Education
Low
Education
160
140
120
100
80
60
40
20
0
No
Education
share (%)
y
Household
Labor
Capital
Dividends
Govt Transfers
Remittances
Poverty
15
Structure of Demand
• Inequality in Consumption by Region
• Rural households (70%)—Consumption 52%.
• Urban households (30%)—Consumption 48 %.
• Household and Intermediate consumption account for
over 85.4% of total demand
• Exports—6.6 %
• Investment—8 %
16
Consumption by Gender
• An equation based on Working Engel Curve
wi  i  1M  2 F  ln(x / n)  ui
• Where w is share of good i, x total expenditure, n
household size, F number of adult equivalent males
and number of adult equivalent females
• We calculated out lay equivalent ratio for both male
and females.
 ijG 
• Where G = F and M
qi / G j
qi / x

x
n
17
Intra Households Allocation of
Resources
Using Following Ratio Household
Consumption Disaggregated by gender
af
CF

C F C M
where af
+
am
CM

C F C M
am =1
Significant Difference - food, clothing, education and health
consumption of men and women. Other commodities are like
public goods which are consumed by men and women equally,
i.e., housing, sanitation facilities and utilities such as water,
electricity, and gas etc.
18
Intra Households Allocation of Resources
Urban
Crop-(Vegetables, and cereals) –
ALL HH-W
Rural
Crop and Live Stock
Men > Women
Live stock & poultry-all hh Men
Cloth- Poor- Men
Rich-women
Clothing vary by type of hh
Rich – Women
Poor-Men
Education and Health
• Poor-female
• Rich-male=female
19
Production - 3
CGE Model
Market sectors—Twenty
Households Social Reproduction—Nine
Leisure—Nine
Labor by gender and by education level
Men-(4)—No education, below primary, 5-9 years, Ed>10
Women-(4)—No education, below primary, 5-9 metric, above
Consumption of
Men
Women
20
Cont…
• It is assumed that non market sectors, leisure
and reproduction, behaves like market sectors.
• Household consume all goods produced social
reproduction and leisure
• Price of non market goods is the opportunity
cost of labor used in these activities.
• Market rigidities are introduced by keeping low
elasticities of substitution
21
Consumption of Market and Non-Market Goods
Maximizing Stone-Geary utility function
• S.t
• Income constraint
• Time constraint
22
Other Features of the MODEL
• Goods with same sectoral classification are different in
qualities for domestic markets and foreign markets.
• Imports and domestically produced goods are imperfect
substitutes.
• CES and CET functions describe substitution and
transformation possibilities reflecting empirical realities,
respectively, for the above two functions.
• Model is calibrated to SAM data using parameters estimated
from SAM and econometrically estimated elasticities.
• Model is solved using GAMS software.
23
Closure

CAB and Nominal exchange rate are constant and real
exchange rate adjust to keep the balance.

Government consumption and Investment are kept fixed
in real term for welfare and poverty analysis.

Savings equal Investment
24
Poverty and Welfare Analysis
A. Capability Poverty Indicators• 1. IMR—Measure satisfaction of at least 4 basic
needs
( IMRbase  IMRmin )
IMR  IMRmin 
 _h
 _h
1  A * CH PC
* CGHEPC
• 2. LR—Education
( LR
 LRbase )
max
LR  LR

max

_e

_e
1  A * CH
* CG
PC
HEPC
25
Cont…
• Income Poverty—Absolute and Relative
— Absolute - FGT Indices
— Relative Women share in poor population
• Time Poverty—Absolute and Relative
—Change in leisure of men and women over base value
—change in leisure of women relative to men
Welfare
-- EV-based on consumption of market goods
– EV-based on consumption of market and non market goods
26
Simulation: Revenue Neutral Trade
Liberalization
Figure 1. Custom Duties and Sales Tax as Percentage of Government Revenue
• Tariff Reduction
• Sales tax increases
35
30
25
Pe
rc
20
en
ta
15
ge
s
10
5
0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002
Year
Custom duties Sales Taxes
27
Variation in Macro Aggregates
Trade Liberalization
Sectors
M/Q E/Xs
PC
PM
Q
D
M
E
VA
Agriculture
3.5
1.05
-1.32 -2.45 -0.21 -0.27
1.47
3.5
-0.23
Industry
26.8
15.2
-4.01 -8.48 0.03
-1.18
3.41
4.34
-0.19
Textile
3.8
42
-2.2
-5.4
1.2
1.0
4.7
4.6
2.6
Machinery
61.5
3.5
-8
-9.5
1.2
-2.4
3.5
6
-2.1
28
Services
4.9
6.1
-1.8
0.66 -0.39 -0.08 -2.98
2.22
-0.19
Factor Market Effects
Female Labour
Male Labour
No
Low
Mediu
m
Total
Edu
Edu
Edu
Edu
Total
0
-1.12
0.91
-2.4
-0.66
-4.57
-0.1
-0.42
4.2
1.8
4.34
7.9
4.5
6.4
2.4
6.12
5.3
0
-9.2
-10.7
-9.21
-5.4
-8.1
-7.2
-10.2
-8.54
-8.6
-6.3
0
0
0
-6.28
-5.5
-8.2
-7.7
-10.4
-6.39
-6.4
Metallic
0
0
0
0
0
-8.6
-11.2
-10.7
-13.3
-11.62
-11.7
Industry
6.24
4.65
1.72
-0.68
2.17
1.04
-1.91
-0.43
-5.64
-1.21
-0.41
Services
-4
-1
-1.7
-3.5
-2.66
3.9
0.9
1.5
-1.5
-0.31
-0.54
0.84
-0.99
-1.62
-2.34
-0.73
-1.2
-4.2
-2.6
-6.2
-0.4
-0.47
No
Low
Med
High
Market Sectors
Edu
Edu
Edu
Edu
Agriculture
0.2
-1.9
-2.5
7
4.7
Chemicals
-6.1
Non-Metallic
Textile
Total
High
Total
Lab
29
Labor to Non Market Activities
Household
Social
Reproduction
Leisure
Urban households
0.48
1.8
No-Education
-1.5
-0.8
Low-Education
4
6.4
Med-Education
0.3
1.6
High-Education
3
3.9
Rural households
-0.45
-1.4
Employee Male
-1.6
-1.8
Female-Headed
2.8
4.8
Self-Employed
-1.1
-1.4
Other
-1.2
-1.5
Employer
-0.8
1.2
Total
-0.02
0.16
30
Variation in Wage Income, Expenditure and CPI
Household
Women
wage
Income
Men Wage
Income
CPI
Household
Expenditure
Urban
2.7
1.3
-1.6
1.06
No-Education
1.3
-1.2
-1.6
-1.7
Low-Education
2.6
0.9
-1.6
3.5
Med-Education
3.0
0.5
-1.7
0.8
High-Education
4.1
4.1
-1.6
4.1
Rural
1.1
-0.3
-1.7
-0.35
Female Headed
hh
0.8
-0.3
-1.7
1.6
Employee
1.5
0.0
-1.7
-1.6
Self-Employed
0.9
-0.5
-1.7
-1.5
Other
2.0
0.7
-1.8
-0.7
Employer
5.2
1.8
-1.7
1.7
Total
1.9
0.5
1.7
0.34
31
Poverty and Welfare
Household
Head
Poverty
Count
Gap
Severity
Welfare
(EV)1
Welfare
(EV)2
3.7
5.6
6.9
-0.01
-0.03
Low-Education
-11.8
-11.1
-12.5
0.03
-0.03
Med-Education
-1.5
-1.2
-3.6
0.01
-0.02
High-Education
-14.0
-13.8
-13.3
0.03
0
-3.6
-2.6
-2.5
0.01
-0.037
Employee Male
3.0
6.2
7.7
-0.01
-0.02
Female-Headed
-3.3
-5.6
-5.9
0.02
-0.05
Self-Employed
2.8
5.2
5.6
-0.01
-0.04
Other
1.7
2.2
7.1
-0.01
-0.03
-3.5
-5.4
-8.3
0
0
2.3
4.5
5.7
-0.004
-0.036
32
-0.3
1.3
2.0
0.004
-0.037
No-Education
Urban households
Employer
Rural households
Total
continued
Relative Poverty-Change in Gender Composition in Poor Household
No
ED
Low
ED
Med
ED
High
ED
Urb
an
Emp
ee
FH
SEmp
Men
-0.11
-0.99
0.03
0
-0.08
Women
0.11
0.99
-0.03
0
0.08
oth
Emp
yer
Rur
Pak
0
0.08
-0.03
-0.07
0
0.02
-0.03
0
-0.08
0.03
0.07
0
-0.02
0.03
Capability Poverty Indicators
M-IMR
0.7
-0.2
-0.06
-0.23
-0.08
0.07
-0.11
0.07
0.02
-0.1
0.04
0.01
F-IMR
0.7
-0.2
-0.06
-0.24
-0.05
0.07
-0.11
0.07
0.02
-0.1
0.05
0.03
M-LR
-0.6
0.24
0.04
0.02
-0.2
-0.92
0.49
-0.3
-0.04
0.15
-0.37
-0.29
F-LR
-0.92
0.95
0.17
0.08
-0.33
-3.33
1.57
-1.12
-0.1
0.59
-1.69
-1.11
-1.4
1.7
-1.49
0.15
Leisure—Relative Time Poverty
Men
-0.7
6.4
1.7
3.8
1.87
-1.7
4.8
-1.3
33
Women
-1.3
6.3
1.2
4.3
1.74
-1.9
4.8
-1.5
-1.5
0.6
-1.68
-0.09
Conclusion
• Revenue Neutral Trade Liberalization
• benefit more to women by increasing
• Market Employment of unskilled worker
• Wage income of women more than men
Harmful as
• Division of labor remains unequal and Women becomes
more time poor
Trade Liberalization, Poverty and Welfare
• Head Count Ratio Reduces at the national level
increases in rural, decreases in urban area
– Trade Liberalization and Welfare
• Welfare improves when measured at consumption level
of market goods
• Deteriorate- with reduction in consumption of market and
non market goods
34
Conclusion
TL and Poor
–
–
–
–
–
–
Increase Work Load on women relative to Men
Deteriorate capabilities—FLR > MLR
Increase income poverty among women relative to men
Increase time poverty by reducing leisure time
Welfare improves - Consumption of market goods only
Welfare deteriorate - consumption of both market and non-market
goods
TL and Rich
–
–
–
–
TL is Gender Neutral for Rich Households
Remittances neutralize negative effects of trade liberalization
Welfare Improves with consumption of market goods
Welfare does not change with total consumption
(market and non market goods)
—work load increases and leisure reduces)
35
Policy Implications
• Complementary Policies
• Reduce Tax on basic need
• Transfer payments
• Poverty Targeted Program
• Public Investment in Social Sector
• Migration – Remittance
• Household Responsibility must be share by men
36
37