STRUCTURAL TRANSFORMATION AND WOMEN EMPLOYMENT IN SOUTH ASIA

International Journal of Human Resource & Industrial Research, Vol.3, Issue 2, Feb-Mar, 2016, pp 01-15 ISSN: 2349 3593 (Online), ISSN: 2349 4816 (Print) STRUCTURAL TRANSFORMATION AND WOMEN EMPLOYMENT IN SOUTH ASIA ww.arseam.com Balwant Singh Mehta and Bharat Singh 1 Faculty, Institute for Human Development, New Delhi and Associate Professor, Satyawati College (Eve.), University of Delhi, Delhi Abstract South Asia has experienced second highest growth rate during the last three decades in the world. It is argued that the structural transformation from low productive employment to high productive employment with women s participation in the economy is essential for the development of the economy. This paper explores whether this high growth rate over more than two decades in South Asian economies has transformed the structure of economy and whether it has been able to create additional and productive employment opportunities particularly for women. The finding shows that structural transformation from agriculture (low productive jobs) to industry or services (high productive jobs) for women is very slow in South Asian countries. Women in the most of countries in South Asia are still largely involved in agriculture, informal sector jobs and unpaid family activities, while women participation in industries and services over the period is rising but apart from creating more productive jobs in order to provide opportunities for the large number of educated young women entering in the labour market in the coming years. In addition, a suitable women environment such as safety, transport facilities, crèche and facility of break to start family and return to work are need of the hour to encourage more women participation in the labour market in services and industrial sector jobs. 1. Introduction South Asia s nearly 1.7 billion people account for 23 per cent of the World s total population (ADB, 2015). This comprises seven countries namely India, Pakistan, Bangladesh, Sri Lanka, submit paper : editor@arseam.com download full paper : www.arseam.com 1

Balwant Singh Mehta and Bharat Singh / Structural Transformation and Women Employment in South Asia Nepal, Bhutan and Maldives. These countries have huge variation in size of land, resources and population with India dominating with 75 per cent share in the total population followed by Pakistan (11 per cent), Bangladesh (9 per cent) and small share of other countries (4 per cent combined share of Sri Lanka, Afghanistan, Maldives and Nepal). The per capita income of Sri Lanka is highest (9728 USD) followed by Maldives (9728 USD), Bhutan (8383 USD), India (5496 USD), Pakistan (4624 USD), Bangladesh (2990 USD), Afghanistan (2329 USD) and Nepal showing the lowest per capita income (2282 USD). Thus, there is wide demographic, resource and income variation across countries in this region of the world. These countries share a common historical legacy of centuries of prosperity and cultural heritage followed by colonial rule and struggle for independence. Most of these countries after independence in 1950s, adopted planned development process. But the outcome was not encouraging characterized by sluggish growth, continued dependence on low-productive agriculture sector, high poverty levels and inadequate creation of productive jobs (Parikh, 2006). It was only during 1980s and 90s that most of the South Asian economies adopted structural reforms which included trade liberalization, financial sector reform and de-regulation of state control on the economy (SDSA 2015). As a result, South Asian region averaged an annual growth rate of around 5.7 per cent during 1980 2000, which further accelerated to 6.5 per cent in the next decade 2000 10 with some fluctuation in recent years. It turned out to be the second fastest growing region in the world, only after East Asia. So, the main question is that whether this high growth rate over more than two decades in South Asian economies has converted into additional and productive employment generation particularly for women. Evidence from within and outside the region suggests that closing gender gap in employment can give a significant boost to GDP and country s progress. There are very few studies done on this topic, particularly on women s employment in South Asia. However, many international organizations such as World Bank, Asian Development Bank and International Labour Organization have published several regional and country level studies on broader topic that also cover gender issues. But literature especially on this important topic is scanty. Hence, there is an urgent need to understand this issue in present context, where gender equality and equity in labour market are the major topic of discussion among policy makers and other stakeholders. This paper is divided into six sections first section introduces the topic, second section highlight the objective, third submit paper : editor@arseam.com download full paper : www.arseam.com 2

International Journal of Human Resource & Industrial Research, Vol.3, Issue 2, Feb-Mar, 2016, pp 01-15 ISSN: 2349 3593 (Online), ISSN: 2349 4816 (Print) section provides theoretical framework, fourth section discuses methodology & data sources, fifth section focuses on discussion and the last section concludes the paper. 2. Objective In the light of the above background the main objective of this paper is to examine the pattern and trend of women s employment in South Asian Countries. 3. Theoretical Framework The stylized structural change development model as discussed by Clarke, Fisher and Kuznet has been historically experienced by developed countries and recently by the East Asian Economies. The scholars argued that at early stages of development when a country is heavily dependent on agriculture, labour productivity is low and the economy is largely stagnant. With increasing labour productivity there is economic growth and higher wages. However, the prospects for rapid productivity growth in agriculture are limited so that labour shift to the non-agriculture sector (manufacturing and services), where there is greater scope for higher productivity and economic growth. Timmer et al. (2012) further argued that structural transformation is a process by which (a) the shares of agriculture in GDP and employment fall over time, and (b) an agriculture and rural sector based economy is replaced by an industrial and service sector based economy. Any existing dualism between the agricultural and the non-agricultural sectors and formal and informal sector gradually disappears over time. 4. Methodology and Data Sources In this background, this paper attempts to understand as to how structural change in economy changes the nature of employment that translated into productive jobs. In this context, a key issue is structural transformation, which is critical pillar of the developmental path (and the associated benefits of increased productivity and living standards). The broad indicators are economy and employment structure and its relationship with gender, sector of employment, nature of employment and informality. The data source is labour force surveys of South Asian submit paper : editor@arseam.com download full paper : www.arseam.com 3

Balwant Singh Mehta and Bharat Singh / Structural Transformation and Women Employment in South Asia countries and used 15+ years population for the analysis. Apart from this ILO and ADB reports and statistics for economy and employment are consulted. Analysis is based on two latest period e.g. around 1999-2005(2000s) and 2011-12(2010s). In this paper, only five major countries namely India, Pakistan, Bangladesh, Sri Lanka and Nepal data has been used for the analysis. These countries cover over 95 per cent of the South Asia s population. 5. Discussion 5.1. Economy For most South Asian economies the share of GDP exceeds the share of industry and agriculture sectors (Figure 1). Agriculture share in GDP has been declining in all the countries, as it is to be expected in the course of development (Annexure 1). The share of agriculture in GDP was highest in Nepal (34 per cent) and lowest in Sri Lanka (12 per cent). Industry s share in GDP has stagnant in all the countries with the exception of Bangladesh (22 per cent to 28 per cent) from 1990 to 2013. On the other hand, the share of services in GDP has increased significantly in India (43 per cent to 57 per cent), Bangladesh (46 per cent to 56 per cent) and Sri Lanka (47 per cent to 57 per cent) during the same period. This shift in GDP share has been attributed to growth of wholesale and retail trade and transport and communication particularly growth of telecommunications, information technology and IT enable services. Similarly, in case of India also the service sector growth is led by communications, banking and information technology services. In addition, income growth and high income elasticity of demand for services and increased growth in foreign demand for service exports, and a decline in relative prices due to productivity gains, have been also responsible for this growth (Gordon and Gupta, 2013). Figure 1: Economic Structure in South Asian Countries, 2013-14 submit paper : editor@arseam.com download full paper : www.arseam.com 4

International Journal of Human Resource & Industrial Research, Vol.3, Issue 2, Feb-Mar, 2016, pp 01-15 ISSN: 2349 3593 (Online), ISSN: 2349 4816 (Print) 56 57 51 54 57 28 25 16 18 15 34 21 25 33 11 Bangladesh India Nepal Pakistan Sri Lanka Agriculture Industry Services Source: Key Indicators for Asia and Pacific, Asian Development Bank, 2015 The GDP growth during the last two decades is led by services in most of the countries except industry (manufacturing) in Bangladesh. This consistent growth in the last two decades as mentioned earlier has slowdown in some countries such as like India, Nepal and Pakistan in recent year due to weak industrial output, political instability and other macro-economic fundamental countries. On the other hand, Sri Lanka and Bangladesh still showed consistent growth due to the rise in export, tourism and remittances (ILO, 2015). 5.2. Employment South Asia s 630 millions workforce accounts for 20 per cent of the world s total workers. However, female are still under-represented in the labour market in the region with just 27 per cent work participation rate (WPR) compared to 77 per cent of male (Figure 2). It is argued that restriction on female education, employment, mobility referred as patriarchy is the major cause of low WPR in the region (SDR, 2015). The WPR of all the countries ranged between 50 and 57 per cent except Nepal with 82 per cent around 2010. There is wide variation in male (72 per cent in Sri Lanka to 86 per cent in Nepal) and female (22 per cent in Pakistan to 79 per cent in Nepal) WPR in the region. The female WPR is almost three times lower compared to male counterparts in India and Pakistan, while the same is more than two times in Sri Lanka and Bangladesh. submit paper : editor@arseam.com download full paper : www.arseam.com 5

Balwant Singh Mehta and Bharat Singh / Structural Transformation and Women Employment in South Asia Nepal is only exception, where female WPR is not only higher than other countries but also very close to male. Figure 2: Work Participation Rate of Female and Male in Major South Asia Countries (15+ years), 2010-11 Bangladesh 79 34 Sri Lanka 72 32 26 76India 22 Pakistan78 79 86 Nepal Male Female Source: Labour force survey of various countries South Asia employment trend over the period (around 2000s to 2010s) have been mixed, there has been an overall decrease of 5 percentage points in work participation rate in South Asia (Annexure 2). Work participation rate of India, Nepal and Sri Lanka has declined, while increased marginally for Bangladesh and stable for Pakistan. India stands out with a decadal decrease of 6 percentage points followed by 2 percentage points both Nepal as well as Sri Lanka. The gender gap in WPR has been increasing in India and Sri Lanka, while reverse in case of Pakistan, Nepal and Bangladesh during same time period. This is mainly due to decline in WPR in India and Sri Lanka and increase in Bangladesh, Nepal and Pakistan. All the South Asian countries are showing employment growth during the last decade with highest in Sri Lanka (3.7 per cent) and lowest in India (0.6 per cent) (Annexure 3). Overall employment growth differs across countries in the region mainly due to fluctuation in female participation rate, which declined in case of India and increased in other countries. The decline in India to some extent may be attributed to increasing participation in education and improvement submit paper : editor@arseam.com download full paper : www.arseam.com 6

International Journal of Human Resource & Industrial Research, Vol.3, Issue 2, Feb-Mar, 2016, pp 01-15 ISSN: 2349 3593 (Online), ISSN: 2349 4816 (Print) in household income levels, which results in withdrawal of subsidiary workers from the labour market. Whereas, Sri Lanka s women participation improved due to greater access to better employment opportunities for educated female. Pakistan introduced a new labour policy in 2002 after a gap of 30 years, emphasizing social security. It provided for a social insurance scheme for the elderly, health benefits for formal and informal workers and regulation for contract employees, resulting rise in women s employment. In case of Bangladesh, garment manufacturing sector mainly responsible for the greater participation and increase of female workers. 5.2.1. Employment by Sector The sector composition of output is also important in determining the employment outcome of growth. Higher growth of sectors that are labour-intensive could lead to an increase in the employment intensity of growth. As discussed earlier transfer of workers from low productivity sectors like agriculture to modern sectors e.g., manufacturing, modern services, etc with higher productivity is an important mechanism for improving the employment outcome of growth as well as for poverty reduction. South Asian economies are still dominated by agriculture with around half (49 per cent) of workforce involved in it, which followed services (27 per cent) and the rest in industrial sector (24 per cent). The only exception is Sri Lanka (43 per cent), where employment in services sector is substantially higher than others countries. Despite the increasing growth in the service sector, India provides only 25 per cent of total employment, and 34 per cent of both Pakistan & Bangladesh. The Industrial sector employment share ranges between 21 per cent and 25 per cent in India, Pakistan and Sri Lanka with relatively lower share in Bangladesh (18 per cent). However, it is stated that most of the net shift of employment to industry goes to construction that could absorb large proportion of unskilled labour. The same picture is true in case of male and female who still heavily depend on agriculture sector for employment in South Asian countries except in case of Sri Lanka and Pakistan, where male employment in service is highest. Nepal has the highest percentage (84 percent) of women and Sri Lanka (38 per cent) lowest in agriculture sector. A decreasing agriculture employment submit paper : editor@arseam.com download full paper : www.arseam.com 7

Balwant Singh Mehta and Bharat Singh / Structural Transformation and Women Employment in South Asia trend has been observed for both male and female over the last decade. In case of Sri Lanka 38 per cent of the female employed in agriculture, but it is still higher than that of men (31 per cent). On the contrary, almost equal percentage of male and female in Sri Lanka are employed in industrial sector (24 per cent), while the women involvement in service sector is highest in Sri Lanka (38 per cent) followed by 22 per cent in Bangladesh, 16 per cent in India, 14 per cent in Pakistan and only 9 per cent in Nepal around 2010. The representation of women in agriculture has declined in most of countries, while increased in services except Pakistan during the last decade (Annexure 4). In industrial sector, women representative has increased in India, Nepal and Bangladesh, while declined in others during the same period. The agriculture sector is based mostly in rural area and the outflow of larger proportions of the male labour force has led to growing feminization of agriculture. A higher percentage of women in agriculture employment points towards the critical role they play in this sector. Women take up responsibilities as agriculture labourers, managers of homesteads and livestock. In some cases land owners, they undertake crop responsibilities that may include sowing, transplanting, weeding, harvesting and post harvesting operations. Despite their overrepresentation in the labour force, women remain invisible and their work unaccounted for. Most women perform these duties as family helpers and remain unpaid, but even wage earners or hired female workers receive meager income in comparison with their male counterparts. Figure 3: Sector wise employment in South Asia (15+ years), 2010-11 40 20 40 22 29 13 27 65 44 16 22 21 16 63 62 9 7 84 40 24 36 14 11 75 45 38 24 24 31 38 Male Female Male Female Male Female Male Female Male Female Bangladesh India Nepal Pakistan Sri Lanka Agriculture Industry Services Source: Labour force survey of various countries submit paper : editor@arseam.com download full paper : www.arseam.com 8

International Journal of Human Resource & Industrial Research, Vol.3, Issue 2, Feb-Mar, 2016, pp 01-15 ISSN: 2349 3593 (Online), ISSN: 2349 4816 (Print) Although the women employment in industrial sector and services is increasing over the years, but studies highlights about the exploitation they face. In industrial sector, despite increasing participation employer hire women assuming that they are docile workers such as less unionized and less likely to demand better wages and improved working condition. A large number of women labourers (semi or unskilled) have thus been sought by export oriented industrial employers, providing new job opportunities for women. On the other hand, the service sector offered limited options to women, semi or unskilled woman faced discrimination in finding better jobs and had few options centered on gendered jobs, like cleaning and catering services, entertainment and care giving till recent years. However the expanding service sector and outsourcing in recent decades, better employment opportunities have opened both in modern (ICT) and traditional services (transport, education, health, hotel, tourism and restaurant) with the latter becoming increasingly ICT-intensive of late. Overall, there is some evidence of a structural shift away of women s employment from agriculture during the last decades. However, the degree of shift is not only small, but also it has not been compensated fully by a shift towards industry and services. There has been a slight increase in employment share in both industry and services implying that the structural transformation of transferring labour with low productivity to high productive sectors has not taken place as desired level in the region. 5.1.2 Formal-Informal Employment Informal employment comprises all informal jobs in enterprise or households. The jobs are also referred as vulnerable employment owing to the lack of job security and benefits and the absence of government regularization. In spite of thee demerits, the informal sector is important because it is a growing part of local and national economies, and it contributes significantly to employment. Nonetheless, reliable data on informal sector employment is very difficult to collect because these workers (mostly women remain invisible and excluded from surveys because of a gender bias against enumerating their work share). In south Asia, women in Bangladesh submit paper : editor@arseam.com download full paper : www.arseam.com 9

Balwant Singh Mehta and Bharat Singh / Structural Transformation and Women Employment in South Asia accounted for 87.7 percent of informal sector employment, the highest in the region, followed by India at 83 per cent and 78.3 per cent in Pakistan in 2010-11. Figure 4: Employment status in South Asia (15+ years), 2010-11 19 46 7 56 48 25 50 44 11 34 40 22 27 8 25 65 49 27 21 40 17 63 42 16 56 53 5 23 40 24 Male Female Male Female Male Female Male Female Male Female Bangladesh India Nepal Pakistan Sri Lanka Self Employed Unpaid Family Paid Employees Source: Labour force survey of various countries In addition, the status of employment also present that woman comprise well over half of unpaid employment as contributing family workers and own account workers in Bangladesh, Pakistan and Nepal, while one-third in India and 23 per cent in Sri Lanka (Figure 4). Over the years, the proportion of female involvement in unpaid family work increased in most of the countries except in Bangladesh, where women s involvement in self employed has gone up (Annexure 5). There is significant proportion of female either self employed in agriculture in rural and small/petty business in urban area or involved in casual labour. In paid jobs a large proportion of women are daily wage or casual with relatively smaller percentage in regular jobs. On the other hand male largely involved in self employment in Bangladesh, Nepal and Pakistan, and wage workers in India and Sri Lanka. Similarly, more than three-fourth (76.1) of the employed are involved in vulnerable employment in South Asia with relatively higher share of female (81.1 per cent) compared to their male (74.7 per cent) counterpart in 2012(ILO, 2015). The skills levels and salary are rising, but at the same time percentage of workers (both male and female) who are earning less than US$ 1.25 per day submit paper : editor@arseam.com download full paper : www.arseam.com 10

International Journal of Human Resource & Industrial Research, Vol.3, Issue 2, Feb-Mar, 2016, pp 01-15 ISSN: 2349 3593 (Online), ISSN: 2349 4816 (Print) (PPP) is about one fourth (24.6 per cent) in South Asia compared to around one-eighth (11.9 per cent) in the world. It is substantially higher (61.5 per cent) for those who are earning less than US$2 per day compared to only 26.7 per cent in the world. 6. Conclusion The rapid economic growth in South Asia over more than two decades has not been able to create a large number of quality and productive job opportunities for women. There has been significant variation in the growth of employment across sector. A major concern across the region is the low female participation in economic activities. Female work force participation rates were less than half of that of male in most countries of South Asia. The positive side of this rather gloomy picture is that the female work participation rate in South Asia is growing faster than their male counterpart in the recent period. The only outlier is India that experienced negative growth in female employment in the last decade. Looking at the largest economies in the region, in Sri Lanka women comprised about a third of the work force, and in India and Pakistan, the ratios were even one quarter and one fifth respectively. In contrast Bangladesh has a relatively higher percentage of women workers at 40 per cent, close to the global average. The explanation for this phenomenon lies in rapid growth of labor-intensive manufacturing, particularly in garments and textiles. Women gained more than men from the expansion of these industries. About 80 percent of garment workers were female in 2010. However, the region is still characterized by prevalence of a large section of women employed in agriculture sector, increasing size of informal sector and increasing concentration of women in unpaid work and gains from growth accrues only to a fraction of the population. From a policy point of view the latter relationship is important in that it points to the necessity of increased social provision of many domains of women s unpaid work (e.g. care of children and the elderly and the provision of health care services) as an enabler of increased labour force participation by women. There is increasing participation of women in services and industry but still a large part of highly educated women are still waiting for suitable jobs or they left job due to marriage or to start family or for safety reasons. So, there is need to create more productive jobs in order to submit paper : editor@arseam.com download full paper : www.arseam.com 11

Balwant Singh Mehta and Bharat Singh / Structural Transformation and Women Employment in South Asia provide opportunities for the large number of educated young women entering in the labour market in the coming years. In addition, a suitable women environment such as safety, transport facilities, crèche and facility of break to start family and return to work are need of the hour to encourage more women participation in the labour market in services and industrial sector jobs. References Global Employment Trend: Risk of a Jobless Recovery?, International Labour Organisation(ILO), Geneva, 2015 Human Development in South Asia (HDSA) 2015, Mahbub ul Haq Human Development Centre (MHHDC), Pakistan, 2015 Key Indicators of Asia and Pacific, 2015, Asian Development Bank, 2015 Parikh Kirit S (2006), Explaining Growth in South Asia, Oxford University Press, New Delhi, 2006 Timmer, P., McMillan, M., Badiane, O., Rodrik, D., Binswanger-Mkhize, H. and Wouterse, F. (2012) Patterns of growth and structural transformation in Africa: trends and lessons for future development strategies. IFPRI Thematic Research Note 2. submit paper : editor@arseam.com download full paper : www.arseam.com 12

International Journal of Human Resource & Industrial Research, Vol.3, Issue 2, Feb-Mar, 2016, pp 01-15 ISSN: 2349 3593 (Online), ISSN: 2349 4816 (Print) Annexure Annexure Table 1: Sectoral Share of GDP of Major South Asian Countries Agriculture Industry Services Countries 1990 2000 2013 1990 2000 2013 1990 2000 2013 Pakistan 26.0 25.9 25.1 25.2 23.3 21.1 48.8 50.7 53.8 Bangladesh 30.2 25.5 16.3 21.5 25.3 27.6 48.3 49.2 56.1 India 29.3 23.4 18.4 26.9 26.2 24.7 43.8 50.5 57.0 Nepal 48.4 37.8 33.9 12.3 17.3 15.2 39.3 44.9 51.0 Sri Lanka 24.2 17.6 10.8 28.9 29.9 32.5 46.9 52.5 56.8 Annexure Table 2: Work Participation Rate of Major South Asian Countries Bangladesh India Nepal Pakistan Sri Lanka 2000s 2010s 2000s 2010s 2000s 2010s 2000s 2010s 2000s 2010s Persons 56 57 58 52 84 82 50 50 53 51 Male 84 79 79 76 88 86 80 78 73 72 Female 27 34 36 26 81 79 19 22 36 32 Annexure Table 3: Employment Growth of Major South Asian Countries Bangladesh India Nepal Pakistan Sri Lanka 2000-2010 2000-2010 2000-2010 2000-2010 2000-2010 Persons 3.0 0.6 2.4 3.1 3.7 Male 1.1 1.7 1.8 2.3 2.9 Female 8.3-2.0 3.3 6.2 5.1 Annexure Table 4: Sectoral Distribution of Major South Asian Countries Bangladesh India Nepal Pakistan Sri Lanka Male Female Male Female Male Female Male Female Male Female 2000s Agriculture 42 68 48 69 68 88 37 65 31 39 Industry 15 13 25 18 15 6 22 14 23 26 Services 43 19 27 14 17 6 41 21 46 35 Total 100 100 100 100 100 100 100 100 100 100 2010s Agriculture 40 65 44 63 62 84 36 75 31 38 Industry 20 13 27 21 16 7 24 11 24 24 Services 40 22 29 16 22 9 40 14 45 38 Total 100 100 100 100 100 100 100 100 100 100 submit paper : editor@arseam.com download full paper : www.arseam.com 13

Balwant Singh Mehta and Bharat Singh / Structural Transformation and Women Employment in South Asia Annexure Table 5: Status of Employment of Major South Asian Countries Bangladesh India Nepal Pakistan Sri Lanka Male Female Male Female Male Female Male Female Male Female 2000s Self 50 16 39 19 52 29 41 15 37 20 Employed Unpaid 10 60 11 34 23 64 19 59 5 20 Family Paid 40 24 50 47 24 8 39 26 58 60 Employees Total 100 100 100 100 100 100 100 100 100 100 2010s Self 48 25 40 22 49 27 43 16 40 24 Employed Unpaid 7 56 10 34 25 65 17 63 5 23 Family Paid 45 19 50 44 26 8 40 21 55 53 Employees Total 100 100 100 100 100 100 100 100 100 100. submit paper : editor@arseam.com download full paper : www.arseam.com 14