Countries with developed businesses reduce the female wage gap

A new World Bank report called Women and Trade: The Role of Trade in Promoting Women's Equality, concluded that trade leads to increased wages for women and helps close the wage gap that exists between men and women, at the same time that it generates better jobs for the latter.

The report, prepared in collaboration with the World Trade Organization, is the first major initiative aimed at quantifying the impact of trade on women, using a new gender-disaggregated data set that has been developed by the World Bank Group and enabling researchers to understand how women are employed, in what sectors they work, how much they earn, and whether or not they participate in global trade. This analysis helps governments see how trade policies can affect men and women differently.

“In the last 30 years, trade has been the engine of poverty reduction. This report shows that if the right policies are put in place, trade can also drive the reduction of the gender gap, ”said Mari Pangetsu, Managing Director of the World Bank. “Trade can expand the role of women in the economy and reduce the inequalities that exist with men, providing them with more and better employment opportunities. And seizing these opportunities will be even more important in the post-COVID-19 world. "

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According to the World Bank, countries that are open to international trade tend to grow faster, innovate, improve productivity, and provide higher incomes and more opportunities for their populations. In the countries most open to trade, openness is measured by the relationship between trade and gross domestic product and levels of gender equality are higher according to the report.

In figures, the report details that companies that are part of global value chains employ a higher percentage of women (33%) than those that are not part of these chains (24%). When countries open up to trade, women's share of manufacturing sector wages rises on average by 5.8 percentage points.

When women work in sectors with a high level of exports, they are more likely to be formally employed. A formal job means better job benefits, training and job security.

The report also emphasizes the importance of addressing discrimination against women in trade policies. While no country openly sets tariffs according to gender, the implicit biases can amount to "pink tariffs" that put women at an economic disadvantage.

Tariffs for women's specific consumer products are higher than those for men's products. In the textile sector, for example, tariffs on women's clothing are USD 2.77 billion higher than those on men's clothing, a consumption gap that grew by around 11% in real terms between 2006 and 2016. This type of inequalities can harm women consumers around the world.

Specific policies can help women maximize the benefits of trade. Such policies include removing trade barriers that prevent women from accessing international markets and improving women's access to education, financial services, and digital technologies. Governments can design measures to facilitate trade that remove gender barriers in this area. These measures could address burdensome customs requirements, limited access to trade finance, and exposure to extortion or physical harassment at borders.