Regional Study on Gender in LAC

1. Regional Study on Gender in LAC Office of the Chief Economist & Poverty and Gender Group (LAC) L. Chioda & R.GarciaVerdu

2. Outline- Regional Study on Gender in LAC • The regional study • Part I: Introduction motivation, trends and the apparent puzzle? • Part II: Empirical facts documented by this study and ongoing work in the region • Part III: A closer look at dynamics within the household: Causal inference • Part IV. Policy chapter/Conclusions • A review of the main stylized facts about gender in LAC relative to other WB regions • A thorough literature review of programs and policies in LAC that are relevant to gender

3. Part I: motivation, trends & apparent puzzle? • Over the past two decades, LAC countries have experienced significant changes : • Family structure; • Women’s labor force participation rate; • Institutional and legal changes; • Public policies. • These factors may have important consequences for • Intra-household allocation of resources • Decision-making ability of women • Examples: CCTs programs; subsidized child care; flexible work arrangements.

4. Apparent gender paradox in LAC: • LAC countries have achieved significant progress in improving gender-specific indicators in: • Education, • Health, • Labor force participation. • However, there is evidence of persistent gender inequalities along other important dimensions: • Wage gaps, • Concentration of women in certain sectors (e.g. informal, retail trade, services, etc.), • Concentration of women in certain occupations (e.g. basic education, childcare, nursing, etc.).

5. Ratio of female to male literacy rates in selected LAC countries Source: World Development Indicators 2009, World Bank.

6. Ratio of female to male secondary school enrollment rates (net) in selected LAC countries Source: World Development Indicators 2009, World Bank.

7. Maternal mortality ratios in selected LAC countries (model estimated, per 100,000 live births) Source: Murray, et al. (2010) “Maternal mortality for 181 countries, 1980–2008: a systematic Analysis of progress towards Millennium Development Goal 5 ,” The Lancet, April 2010.

8. Change in female labor force participation in selected LAC countries Source: Chioda and Demombynes

9. Main Objectives of RS • Deepen the understanding of inequalities underlying the apparent paradox in LAC, • Analyze various aspects of women’s economic participation: • Labor force participation (extensive margin) • Wage gaps • Sectoral occupation (formal vs. informal sectors) • Shed light on the household decision making process • How? By exploiting changes in bargaining power & constraints on the allocation of resources induced by exogenous changes in policies.

10. Value Added of the RS • Trends, dynamics and snapshots are comprehensive: • based on long time series, large samples, and homogenized household surveys or census data. • Focus on intra-household allocation of resources and decision making ability of women and its relation to women’s economic participation: • Exploit policy changes as instrument to establish causal inference • Rigor of empirical techniques & methodology.

11. Part II: Empirical Regularities • Fourempirical facts point to the importance of household dynamics: • The increase in female labor forceparticipation rates in LAC is largely explained by changes in education and family formation (marriage and children) • Gender wage gapsat low income levels are partly explained by family structure (presence of children in HH) • Discrepancy in sectoral mobility patternsacross occupational states are also mostly explained by family structure • Female headed householdshave increased in #s overtime and appear to have on average closed the “gap” relative to male headed households, in terms of wellbeing & poverty measures

12. Fact 1 : Family & Education matter • Women’s educationconsistently accounts for large shares of the change in every country (18-81% of overall change; single most predictive factor of the rise in FLFP) • Changes in family formation explain between 20 and 30% of the increase in FLFP. • Increases in women’s educ. levels and changes in family structure (marriage and fertility) emerge as the most important factors associated w/ the rise in FLFP. • Single womenwith and without children have similar LFP. Married women’s LFP more responsive to family formation • Presence of additional source of income (spouse) relaxes the budget constraint. A revealed preference argument? Social norms? (Evidence of changing over time) RS Background Paper: Chioda & Demombynes - Census data for several countries

13. Fact 2: Gender Wage Gaps • Evolution over time: gender wage gaps in LAC have decreased from 16.3 to 8.8% of the average female wage over the period 1992 to 2007; nevertheless, after matching male and female pairs with identical characteristics, the gender wage gaps is greater and has decreased less than the unconditional wage gap, from 33.7 to 29.6% over the same period • Gender wage gaps and family structure: for low income HHs, a large fraction of the wage gap is explained by presence of children 6 years old or younger

14. Fact 3: Transition between formal and informal sectors & family structure • Males experience different transitions and durations than females, but very similar ones to single women • Sectoral allocation of women and their patterns of transition vary greatly with family structure.  • Singlewomen are over-represented in formal employment by perhaps 15 percentage points, while married/w. children are underrepresented.  • Opening up of the self employment-inactivity corridor seems to be correlated with family formation. • comparative advantage - demand for flexibility, or • possible discrimination against married women who are likely to have children, or who already have children. RS Background Paper: Bosch & Maloney – Rotating Panel Data for Br. Arg. Mx.

15. Fact 4: Female Headed Households (FHH) • A closer look at characteristics of female headed households (FHH) using Census data for several LAC countries. • Estimates indicate that the proportion of FHHs has increased over time. • The increases in FHHs appear to be larger among HHs with more educated heads and those separated, divorced, or widowed. • FHHs experienced Well-being improvements (measured by UBNI) over time – exception for Argentina and Venezuela • Female and Male headed households are not statistically (signif.) different for comparisons on every country-census year pair in terms of well-being. • In LAC we find no evidence of greater povertyamong them relative to male headed households (as measured by tests of stochastic dominance), irrespective of the FHH definition RS Background paper Aritomi & Orlando - Census data for several countries

16. Lessons from Descriptive Analysis: • (1)Family structure and (2) family formation decisions are key to understanding female economic participation. • Compelling case to focus on households to identify what determines allocation of resources and distribution of bargaining power. • How? • Identification: whenever possible, exploit exogenous variation induced by policy changes • When causal inference is not feasible, accurate description of trends and new phenomena will be provided: e.g. female headship.

17. Part III: A closer look at dynamics within the household: • To gain greater insight into economic participation of women, we will consider exogenous changes in: • Economic resources nominally controlled by women(policy: CCTs) • Time allocation(policy: provision of subsidized child care) • Legal institutions(policy: part time work legislation) • Human capital & education as possible sources of changes in bargaining power(policy: compulsory schooling)

18. The role of HH bargaining models & economic outcomes • Transfer of resources to women and policy responses will depend on the underlying HH bargaining model. • We formally investigate the nature of HH dynamics by analyzing expenditure patterns and by testing unitary versus collective decision making model (Attanasio and Lechene, Oportunidades CCT)

19. (a.1) Control over economic resources & bargaining power • Changes in economic resources controlled by women may impact dynamics and outcomes in several ways (CCTs): • Domestic violence: additional control of resources by women may result in unanticipated consequences, at least in the short run. • short-run – women in beneficiary HHs were less likely (by 33%) to be victims of physical abuse, but more likely (by 60%) to suffer emotional abuse (with no associated physical abuse) than non-beneficiary women. • longer-run – women in beneficiary households are as likely to experience abuse of physical or non-physical forms as women in non-beneficiary couples. RS Background Paper: Bobonis & Castro, Oportunidades CCT, Mexico.

20. (a.2) Control over economic resources & economic outcomes • Changes in economic resources controlled & by women may impact dynamics and outcomes in several ways (CCTs): • FLFP • The availability of additional resources appears NOT to be linked to changes in adult (female) LFP • This is consistent with the hypothesis that LFP is not constrained by control over economic resources – revealed preference? • Increase in LFP for girls (age range) – from the paper. RS Backgrond Paper: Sinha & Montes, Juntos CCT, Peru.

21. Allocation of time resources & economic outcomes (1) : • Changes in childcare modalities de facto relaxes time demands on women, generating a shift in control over time resources; • Existing empirical evidence on childcare impact on FLFP a bit inconclusive (references? ) existing studies oecd & lac. • Randomized experiment (Br.) to analyze relationship between subsidized child care & FLFP. • For the overall population, access to (subsidized) child care does not seem to increase female labor force participation • For the sub-population of women who were not previously working, It does appear to motivate them to look for a job. RS Background Paper: Lunde and Olinto, Brazil ECD.

22. Allocation of time resources & economic outcomes (2) : • Analogously, economic participation and childcare are made more “affordable” by flexible work arrangements: • Bosch & Maloney investigate how the introduction of part time work legislation (1995) in Argentina seemed to impact sectoral occupation transitions. • After the reform women with more family responsibilities.. • increased their participation…. • & presence in the formal sector relative to those women without children • Carmen P (cite) Also: other evidence from OECD countries. RS Background Paper: Bosch & Maloney, Argentina 1985 reform.