Can trade explain the Middle East and North Africa (MENA) paradox?

The majority of developing countries have significantly lowered gender gaps in education and health, and some have achieved notable improvement in women’s political participation (measured mainly by the proportion of seats held by women in national parliaments). Yet, in some countries these achievements have not led to women’s increased participation in labor markets. Worldwide, the female-to-male ratio of participation in the labor force for those aged 15 and above is about 68% (in 2012) and has not changed much since the early 1990s. The world average (in 2014) percentage of women, age 15 to 64, participating in the labor force remains substantially lower than that of their male counter parts; 55.3% versus 81.7%. In the Middle-East and North Africa (MENA) region, in particular, women have a labor force participation rate that is not commensurate with their achievements in education, health, and access to other women’s rights.

The ‘MENA paradox’ has been documented in several studies (e.g., World Bank 2013). The paradox refers to the stylized fact that the MENA region achieved notable progress in lowering gender inequality in health and education but this has not been accompanied by a significant rise in women’s participation in labor markets and politics. Female participation in wage employment, in particular, is markedly low.

 In this paper, I explore whether increased trade openness is a mechanism that could explain the low participation, relative to men, in labor markets by women. I address this question by performing empirical analyses using panel data from a large group of developing economies and several econometric specifications. I focus, in particular, on the differentiated effects of trade in each region on women’s participation in the labor force. The econometric results indicate that greater openness to trade, indeed, seems to be associated with lower female share of the labor force in the MENA region, suggesting that globalization may have contributed to expanding male-labor-intensive employment (e.g., mining) and/or caused substitution of male labor for female labor. I discuss specific existing industry evidence from Morocco.