How trade diversification and economic growth affect gender inequality in female labour market participation? The case of India

Abstract

PurposeThe author attempts to investigate through empirical exercise how the chances of female employment opportunities rise in a developing country like India, against the backdrop of changes in institutions that are associated with globalization. Following Dreher et al. (2012), the author measures how institutional arrangements proxied by political, cultural and social globalization impact women's labour force participation.Design/methodology/approachThe relation between female labour force participation, economic growth and further export diversification are quite complex. The paper develops a simultaneous equation model through a growth equation, gender equation and globalization equation to identify the factors impacting female labour market opportunities in India, based on annual time series data 1991–2019.FindingsThe major results of this study are summarized as: (1) it is social globalization that positively impacts gender equality in employment opportunities apart from economic growth and trade diversification. (2) Evidence of “feminization of labour force” in the context of trade diversification is found and (3) equal gender opportunities reflect in equalizing outcomes in the labour market.Originality/valueThe present study contributes to the literature on gender inequality and economic growth in three major ways. First, it focuses upon a set of factors that explain gender inequality in opportunities that may impede economic growth. The study tries to explore how the persistence of gender inequality in the labour market influences negatively economic growth. Further how economic growth and trade diversification create pathways to impact gender inequality in the labour market. Second, the study tries to show how the male–female gap in employment opportunities constrains trade diversification. Third, trade diversification can induce modifications in the structure of production across sectors which can have a positive or negative impact on gender inequality. The actual impact is a matter of empirical exploration which this study has attempted. The author has shown in this study that gender inequality in a developing country like India reduces trade diversification directly through gender gaps in opportunity and indirectly by impeding economic growth which adversely impacts trade diversification.