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Globalization, economic policy and employment:
Poverty and gender implications

Employment Strategy Papers

James Heintz

International Labour Organization (ILO)

March 2006

SARPN acknowledges ILO as a source of this document:
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Sweeping changes have taken place in the world’s economies in recent decades, changes which have reshaped the structure of employment on a global scale. National economies are now more integrated into the global system than at any other point in the recent past. The volume of international trade and the magnitude of cross-border capital flows have reached historically high levels. Advances in communications and transport technologies have led to the establishment of complex international production networks, with developing countries producing an unprecedented level of manufactured exports within global supply chains. Fundamental shifts in economic policies have accompanied the process of globalization. These policies have emphasized maintaining low rates of inflation, liberalizing markets, reducing the scope of the public sector and encouraging cross-border flows of goods, services and finance, but not labour.

It is commonplace these days to assert that globalization provides enormous challenges as well as opportunities. This observation is particularly relevant with regard to employment. The era of global integration has been associated with far-reaching changes in the structure of employment, including pressures for increased flexibility, episodes of “jobless growth,” growing informalization and casualization, expanding opportunities for the highly skilled, but vanishing opportunities for the less skilled. New employment opportunities have been created in many developing countries due to the expansion of globally-oriented production, helping to reduce poverty and raise incomes. However, contradictions abound. Many of the new employment opportunities are precarious, and the size of the “working poor” population remains staggering.

The transformation of women’s employment during this period has been similarly farreaching. More women participate in paid employment than at any other time in history. The entry of women into the labour force has meant that, in many cases, the economic opportunities available to them have grown. However, equality of opportunity remains elusive. Sex segmentation of labour markets is endemic, with women concentrated in lower quality, irregular and informal employment. Economic stabilization programmes and the process of global integration have frequently squeezed household incomes, pushing women to enter the paid labour force. At the same time, economic reforms have intensified demands on women’s unpaid work, creating a situation in which increasing the supply of women’s labour is a central strategy by which families cope with fundamental economic change. At a basic level, women’s employment, paid and unpaid, may be the single most important factor for keeping many households out of poverty.

Employment is the primary channel through which the majority of the population can share in the benefits of economic growth. In particular, employment plays a critical role in ensuring that economic growth translates into poverty reduction. However, the ability of employment to reduce poverty depends on prevailing gender relations and intra-household dynamics. Therefore, any analysis that seriously considers the connections between growth, employment and poverty reduction must incorporate a gender perspective or run the risk reaching erroneous conclusions.

This study explores the growth-employment-poverty reduction nexus through a gender perspective. In particular, it explores how changes in economic policies affect women’s and men’s employment and proposes ways of assessing the implications of these changes for poverty and gender equality.

The paper is structured as follows. The next section presents a conceptual framework for linking growth to employment and employment to poverty reduction within a gender perspective. The third section then reviews trends in labour force participation, women’s and men’s employment, informalization, earnings and poverty rates among the global working poor. The fourth part of the report extends the analysis by critically examining two frameworks used for understanding the gendered nature of work and poverty: the “feminization of labour” and the “fe minization of poverty”. The fifth section is in many ways the core of the report. It presents and reviews evidence concerning the impact of changes in economic policy on women’s and men’s employment. Four policy areas are explored: monetary policy, trade policy, exchange rate regimes and public sector restructuring. The sixth and final conclusion sections pull the analysis together and suggest ways of building an alternative policy framework of employment-centred development for poverty reduction.

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