Workin’ for a livin’ in Bangladesh: Garment workers and outcomes for women

The garment industry in Bangladesh has received a lot of bad press in the last few years with the collapse of factories and threats of boycotts by workers’ rights groups. The question of whether employment in these industries is beneficial to workers, and particularly female workers, remains open. Economists tend to emphasize the effects on female empowerment (bargaining power, buying power, delayed childbearing, for instance), while rights groups enumerate the safety concerns and potential human rights abuses (long hours, low pay, no overtime pay, etc.).

While by no means offering a definitive answer the question, a new paper by Rachel Health and Mushfiq Mobarak (NBER gated or not gated) attempts to show that the economist are right. The paper shows that exposure to garment sector jobs increases age at marriage and first birth for girls and women in Bangladesh. Child marriage and early childbirth are common in Bangladesh, outcomes which expose women and girls to abuse, early mortality and morbidity, domestic violence, low educational attainment and more. If the garment industry is avoiding or delaying some of these outcomes by providing different opportunities, that’s certainly something to note.

Perhaps more importantly, the paper shows that there are significant returns to education within the garment sector. More educated employees receive higher pay and opportunities for advancement. Subsequently, knowledge of these additional returns to education may actually increase educational attainment in addition to these other desirable outcomes. There’s some concern about endogenous factory placement in the paper and how that might affect their results, but the authors do a nice job addressing it.

Declining LFP in the US

A new White House Council of Economic Advisors report outlines the decline in the Labor Force Participation rate over the last seven years in the US, parsing the more then 3 percentage point decline in overall participation rates. The last few years have seen big changes, attributed to aging of the population (1.6 percentage points); cyclicality (0.5 percentage points); and a pretty large residual (1 percentage point), likely the result of pre-Great recession trends and the “severity of the Great Recession.” You can read more for details, but this graph of historical trends caught my eye. Look at the decline in Male LFP over the past 65 years!

Screen Shot 2014-07-17 at 11.26.28 AM

h/t @JustinWolfers

Glass ceilings and social norms

A recent working paper (gated) by Marianne Bertrand, Sandra Black, Sissal Jensen, and Adriana Llenas-Muney examines a Norwegian law that aimed to put more women in the C-suite. The results are decidedly mixed, from reading the abstract, and I’m not sure what’s to come out of it. One easy conclusion is that there no “virtuous cycle” or “trickle-down” effect from putting more–or more qualified–women into top positions.

My first thought was simply that it hasn’t had time to take effect. The law was only enforced in January 2008, but that doesn’t seem that short unless there’s a binding constraint on the number of educated women who might be eligible for jobs down the line. However, there don’t seem to be any effects on university students’ intended career paths or desired fertility.

You could also criticize the clear selection by firms that decided to stay public and thus had to comply with the law, but if anything, that would bias you towards finding a significant result.

So, is it a question of who is being hired? If these executives are women but don’t display characteristics that make them seem like appropriate role models to young women, we might not expect to see an effect. Or is it that these quotas are in place, but haven’t done anything to affect social norms? If societal expectations to marry and reproduce aren’t seen as compatible with higher earning, higher power jobs, then perhaps we won’t seen an effect at all of more visible women.

The abstract is here:

In late 2003, Norway passed a law mandating 40 percent representation
of each gender on the board of publicly limited liability companies.
The primary objective of this reform was to increase the
representation of women in top positions in the corporate sector and
decrease gender disparity in earnings within that sector.  We
document that the newly (post-reform) appointed female board members
were observably more qualified than their female predecessors, and
that the gender gap in earnings within boards fell substantially.
While the reform may have improved the representation of female
employees at the very top of the earnings distribution (top 5 highest
earners) within firms that were mandated to increase female
participation on their board, there is no evidence that these gains
at the very top trickled-down.  Moreover the reform had no obvious
impact on highly qualified women whose qualifications mirror those of
board members but who were not appointed to boards.  We observe no
statistically significant change in the gender wage gaps or in female
representation in top positions, although standard errors are large
enough that we cannot rule economically meaningful gains.  Finally,
there is little evidence that the reform affected the decisions of
women more generally; it was not accompanied by any change in female
enrollment in business education programs, or a convergence in
earnings trajectories between recent male and female graduates of
such programs.  While young women preparing for a career in business
report being aware of the reform and expect their earnings and
promotion chances to benefit from it, the reform did not affect their
fertility and marital plans.  Overall, in the short run the reform
had very little discernible impact on women in business beyond its
direct effect on the newly appointed female board members.

Women’s security and work in India

Pretty much all I think about these days is women’s labor force participation, primarily in India. One of the big things on my mind is how increased reports of sexual assault, rape, and other crimes against women, particularly on public transportation, affect labor market entry and exit, hours worked etc. I’m clearly not the only one thinking about this as the Indian government has released a budget detailing pretty significant investment in women’s safety and to address crime.

From an article on the new budget:

“Women’s safety is a concern shared by all the honourable members of this House. We need to test out different approaches that can be validated and scaled up quickly,” he said.

The government plans to spend $9 million on a pilot scheme to improve women’s safety on public transport, and an additional $28 million in large cities.

“Crisis Management Centres” will also be set up in all government and private hospitals in the capital, to provide support to victims of crimes such as rape and domestic violence.

The number of crimes against women in India reported to the police such as rape, dowry deaths, abduction and molestation increased by 26.7 percent in 2013 from a year earlier, rising to 309,546 from 244,270, the National Crime Records Bureau says.

One of the primary questions is whether these increases in rape, dowry death , abduction and molestation are a result of some changes in female autonomy, or labor force participation, or something else that could lead to backlash, or whether it’s just an increase in reporting due to reduced stigma associated with reporting. It could also be something else all together, of course, but at least someone’s paying attention.

The Grand Gender Convergence

The American Economic Review was sitting in my mailbox this morning. Yes, I do realize I’m pretty much the last economist on earth to still receive hard copy journals, but don’t knock it ’til you try it.

Claudia Goldin writes the lead article from the April issue. It’s titled A Grand Gender Convergence: Its Last Chapter. The abstract is below.

The converging roles of men and women are among the grandest advances in society and the economy in the last century. These aspects of the grand gender convergence are figurative chapters in a history of gender roles. But what must the “last” chapter contain for there to be equality in the labor market? The answer may come as a surprise. The solution does not (necessarily) have to involve government intervention and it need not make men more responsible in the home (although that wouldn’t hurt). But it must involve changes in the labor market, in particular how jobs are structured and remunerated to enhance temporal flexibility. The gender gap in pay would be considerably reduced and might vanish altogether if firms did not have an incentive to disproportionately reward individuals who labored long hours and worked particular hours. Such change has taken off in various sectors, such as technology, science and health, but is less apparent in the corporate, financial and legal worlds.

Given the nature of the debate over the past few months on equal pay legislation and other forms of labor market discrimination against women, and more importantly against individuals that don’t conform to the two-gender paradigm, to claim that the gender convergence is in its last chapter seems a little short-sighted. But she’s a historian and a very smart economic historian at that, having written a book, Understanding the Gender Gap: An Economic History of American Women, which I recommend frequently to economics majors interested in labor and gender. The article is essentially an extension of the book’s arguments, this time concentrating on occupational differences.

It’s a good read and would be great for students. In fact, perhaps I’ll have mine read it this week. Look out for their tweets!

Women and work and the stalling of a drive toward equality

Phillip Cohen of the Family Inequality blog has a piece in the Sunday NYTimes about women’s labor force participation over the past half-century. I’d quote from it, but there are too many things. I say just go read it.

He also mentions Sarah Damaske‘s new book, For the Family?: How Class and Gender Shape Women’s Work,
which I promptly ordered (and think you should, too).

Twilight Zone Tuesday, or Delayed Sept. Jobs Report

As if I didn’t already feel like I’d stepped into the twilight zone, trying to teach classes on a Tuesday morning after two days of traveling from Thailand to Easton, the September jobs report came out today, two and a half weeks late due to the shutdown.

In sum, the economy was already struggling before the shutdown, and now $24 billion later, it’s probably going to be even more difficult to get humming again. One bright spot, many more full time jobs than part-time jobs are being created than previously thought, which is good and exposes a chink in the Obamacare-kills-jobs refrain. There’s lots of good summaries out there on the jobs report, but if you have time, I think you should go read it yourself.