Gendered effects of trade liberalization on labour market outcomes in Malawi
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Trade can significantly contribute to agricultural growth, wider economic development and decent work. Considering the agrarian nature of most developing countries, and the role that women play in agriculture, particularly sub-Saharan Africa where they contribute 50% or more in farm labour, it is of paramount importance to consider gendered impacts of trade liberalization on labour market outcomes.
While the impact of trade in improving agricultural output has been well documented, the distributional implications of trade liberalization in the labour market remain to be understood more so across gender. While exploring trends in labour market outcomes, changes in legislation and how Malawi is aligning itself in bilateral and multilateral trade agreements to ensure equitable economic growth and job creation, this study uses a simple agricultural sector focused static CGE model and a behavioural top-down micro simulation approach to unpack potential gendered effects of trade liberalization on the labour market in terms of occupational choice i.e. wage earners, non-agriculture self-employed, and farmers skilled and unskilled individuals in Malawi’s labour market from a discrete labour supply perspective. Second, the study seeks to assess the gendered impact of trade liberalization on farm/microenterprise/self-employment revenues among skilled and unskilled agriculturally employed individuals.
Results show that a move towards trade restrictions such as imposition of high tariffs results in low economic activities leading to a decline in labour demand across the sectors of the economy. When results are passed on to the micro economic data, we find that a 50% Most Favoured Nation tariff could result in over 1 million job losses where the greatest losers would be women, across the labour market – but greatest in agriculture. Thus, trade restrictions in a more flexible labour market increase unemployment.
Trade can significantly contribute to agricultural growth, wider economic development and decent work. Considering the agrarian nature of most developing countries, and the role that women play in agriculture, particularly sub-Saharan Africa where they contribute 50% or more in farm labour, it is of paramount importance to consider gendered impacts of trade liberalization on labour market outcomes.
While the impact of trade in improving agricultural output has been well documented, the distributional implications of trade liberalization in the labour market remain to be understood more so across gender. While exploring trends in labour market outcomes, changes in legislation and how Malawi is aligning itself in bilateral and multilateral trade agreements to ensure equitable economic growth and job creation, this study uses a simple agricultural sector focused static CGE model and a behavioural top-down micro simulation approach to unpack potential gendered effects of trade liberalization on the labour market in terms of occupational choice i.e. wage earners, non-agriculture self-employed, and farmers skilled and unskilled individuals in Malawi’s labour market from a discrete labour supply perspective. Second, the study seeks to assess the gendered impact of trade liberalization on farm/microenterprise/self-employment revenues among skilled and unskilled agriculturally employed individuals.
Results show that a move towards trade restrictions such as imposition of high tariffs results in low economic activities leading to a decline in labour demand across the sectors of the economy. When results are passed on to the micro economic data, we find that a 50% Most Favoured Nation tariff could result in over 1 million job losses where the greatest losers would be women, across the labour market – but greatest in agriculture. Thus, trade restrictions in a more flexible labour market increase unemployment.