A Gender-Focused Macro-Micro Analysis of the Poverty Impacts of Trade Liberalization in South Africa

Abstract

Despite the general presumption in favor of trade liberalization, the question of how to implement it in a way to ensure equitable income distribution and sustainable poverty alleviation in developing countries is at the core of the current trade debate. We build a macroeconomic framework that integrates both market and non-market activities, while distinguishing male and female workers throughout, in order to evaluate impacts of tariffs elimination on men and women in South Africa. Our study reveals a strong gender bias against women with a decrease in their labor market participation, while men participate more in the market economy. This strong result is due to the fact that female workers are concentrated in contracting sectors that were initially among the protected sectors and that benefit little from the fall in input prices. In contrast, male workers are more concentrated in the expanding export-intensive sectors. Female labor market participation drops particularly for Black African women, as they are more concentrated in contracting sectors. As male labor market participation and real wages increase more than for their female counterparts, their income share increases within the household. Women continue to suffer nonetheless from a heavy time use burden given their increased domestic work with trade liberalization.