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 w
omen 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 )
50 40 30 20 10 0 1 2
years
Series1 3 Series2 12
Time Allocation between market and non market activities
Women Urban • Market – 26.5 to 40 % • Household- 34.1 to 45.3% • Leisure- 10 to 20 % Men 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
Sectors Crop* Live Stock Textile Time allocation by Gender in Market Economy
Male Labour in hours
No Education Low Education Med Educatio n High Educatio n 39.5
21.3
21.8
7.9
No Education 66.2
Female labour in hours
Low Education 55.5
Med Educatio n 51.9
High Educatio n 0.0
11.5
6.5
5.9
1.8
10.0
11.2
6.5
0.0
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** Education and Health** 8.0
1.4
13.2
16.8
31.5
2.3
4.3
13.5
4.3
1.3
0.0
0.0
0.3
0.9
13.3
26.7
14
160 140 120 100 80 60 40 20 0 Household Reciepts by Source and Poverty
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
w i
i
1
M
2
F
ln(
x
/
n
)
u i
• 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
q i
q i
/
G j
/
x
x n
• Where G = F and M 17
Intra Households Allocation of Resources
Using Following Ratio Household Consumption Disaggregated by gender
a f
C F C
F C M a m
C F C
M C M
where af + 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
Urban Intra Households Allocation of Resources Rural Crop-(Vegetables, and cereals) – ALL HH-W 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
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CGE Model
Production - 3 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 transformation functions possibilities describe reflecting respectively, for the above two functions.
substitution empirical and realities,
•
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
IMR
IMR
min 1 (
IMR A
*
base
CH
_
PC h IMR
* ) min _
h CG HEPC
• 2. LR—Education
LR
LR
max 1
A
( *
LR
max
CH
_
PC
e LR base
) * _
e CG 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
• Tariff Reduction • Sales tax increases
Figure 1. Custom Duties and Sales Tax as Percentage of Government Revenue
35 30 Pe 25 rc en 20 ta ge s 15 10 5 0 1980 1982 1984 1986 1988 Custom duties 1990 1992 Sales Taxes 1994 Year 1996 1998 2000 2002 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
Services 4.9
6.1
-8 -9.5
1.2
-2.4
3.5
6 -2.1
-1.8
0.66
-0.39 -0.08
-2.98
2.22
28
-0.19
Market Sectors
Agriculture
Textile Chemicals Non-Metallic
No Edu 0.2
7
-6.1
-6.3
Factor Market Effects
Female Labour Low Edu -1.9
4.7
0 0
Med Edu -2.5
4.2
-9.2
0
High Edu 0 1.8
-10.7
0
Total -1.12
4.34
-9.21
-6.28
No Edu 0.91
7.9
-5.4
-5.5
Male Labour Low Edu Mediu m Edu -2.4
-0.66
High Edu -4.57
4.5
-8.1
-8.2
6.4
-7.2
-7.7
2.4
-10.2
-10.4
Total Lab Total -0.1
6.12
-8.54
-6.39
-0.42
5.3
-8.6
-6.4
Metallic
Industry Services Total
0
6.24
-4 0.84
0
4.65
-1 -0.99
0
1.72
-1.7
-1.62
0
-0.68
-3.5
-2.34
0 2.17
-2.66
-0.73
-8.6
1.04
3.9
-1.2
-11.2
-1.91
0.9
-4.2
-10.7
-0.43
1.5
-2.6
-13.3
-5.64
-1.5
-6.2
-11.62
-1.21
-0.31
-0.4
-11.7
-0.41
-0.54
-0.47
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Household Urban households
No-Education Low-Education Med-Education High-Education
Rural households
Employee Male Female-Headed Self-Employed Other Employer
Total
Labor to Non Market Activities
Social Reproduction 0.48
-1.5
4 0.3
3
-0.45
-1.6
2.8
-1.1
-1.2
-0.8
-0.02
Leisure 1.8
-0.8
6.4
1.6
3.9
-1.4
-1.8
4.8
-1.4
-1.5
1.2
0.16
30
Variation in Wage Income, Expenditure and CPI Household Women wage Income Men Wage Income CPI Household Expenditure Urban
No-Education Low-Education Med-Education High-Education
2.7
1.3
2.6
3.0
4.1
1.1
1.3
-1.2
0.9
0.5
4.1
-0.3
-1.6
-1.6
-1.6
-1.7
-1.6
-1.7
1.06
-1.7
3.5
0.8
4.1
-0.35
Rural
Female Headed hh Employee Self-Employed Other Employer
Total
0.8
1.5
0.9
2.0
5.2
1.9
-0.3
0.0
-0.5
0.7
1.8
0.5
-1.7
-1.7
-1.7
-1.8
-1.7
1.7
1.6
-1.6
-1.5
-0.7
1.7
0.34
31
Household
No-Education Low-Education Med-Education High-Education
Urban households
Employee Male Female-Headed Self-Employed Other Employer
Rural households Total
Poverty and Welfare
Head Count
3.7
-11.8
-1.5
-14.0
-3.6
3.0
-3.3
2.8
1.7
-3.5
2.3
-0.3
Poverty Gap
5.6
-11.1
-1.2
Severity
6.9
-12.5
-3.6
Welfare (EV)1
-0.01
0.03
0.01
-13.8
-2.6
6.2
-5.6
5.2
2.2
-5.4
4.5
1.3
-13.3
-2.5
7.7
-5.9
5.6
7.1
-8.3
5.7
2.0
0.03
0.01
-0.01
0.02
-0.01
-0.01
0
-0.004
0.004
Welfare (EV)2
-0.03
-0.03
-0.02
0
-0.037
-0.02
-0.05
-0.04
-0.03
0
-0.036
32
-0.037
Men Women M-IMR F-IMR M-LR F-LR continued Relative Poverty-Change in Gender Composition in Poor Household No ED Low ED Med ED High ED Urb an Emp ee FH S Emp oth Emp yer Rur Pak -0.11
-0.99
0.03
0 -0.08
0 0.08
-0.03
-0.07
0 0.02
-0.03
0.11
0.99
-0.03
0 0.08
0 Capability Poverty Indicators -0.08
0.7
0.7
-0.6
-0.92
-0.2
-0.2
0.24
0.95
0.03
0.07
-0.06
-0.06
0.04
0.17
-0.23
-0.24
0.02
0.08
-0.08
-0.05
-0.2
-0.33
0.07
0.07
-0.92
-3.33
-0.11
-0.11
0.49
1.57
0.07
0.07
-0.3
-1.12
0.02
0.02
-0.04
-0.1
0 -0.02
0.03
-0.1
-0.1
0.15
0.59
0.04
0.05
-0.37
-1.69
0.01
0.03
-0.29
-1.11
Men Women Leisure—Relative Time Poverty -0.7
6.4
-1.3
6.3
1.7
1.2
3.8
1.87
-1.7
4.8
-1.3
-1.4
4.3
1.74
-1.9
4.8
-1.5
-1.5
1.7
0.6
-1.49
33
0.15
-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