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Office of the Chief Economist & Poverty and Gender Group (LAC)L. Chioda & R.Garcia Verdu 1Regional Study on Gender in LAC4/28/2010Outline- Regional Study on Gender in LAC2The regional study Part I: Introduction motivation, trends and the apparent puzzle?Part II: Empirical facts documented by this study and ongoing work in the regionPart 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 regionsA thorough literature review of programs and policies in LAC that are relevant to gender

Part I: motivation, trends & apparent puzzle?3Over the past two decades, LAC countries have experienced significant changes :Family structure;Womens 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 womenExamples: CCTs programs; subsidized child care; flexible work arrangements.

Apparent gender paradox in LAC:4LAC 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.).

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

6Source: World Development Indicators 2009, World Bank.

Ratio of female to male secondary school enrollment rates (net) in selected LAC countries7Source: Murray, et al. (2010) Maternal mortality for 181 countries, 19802008: a systematic Analysis of progress towards Millennium Development Goal 5 , The Lancet, April 2010.

Maternal mortality ratios in selected LAC countries (model estimated, per 100,000 live births)8

Source: Chioda and DemombynesChange in female labor force participation in selected LAC countries Main Objectives of RS9Deepen the understanding of inequalities underlying the apparent paradox in LAC, Analyze various aspects of womens economic participation:Labor force participation (extensive margin)Wage gapsSectoral 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.Value Added of the RS10Trends, 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 womens economic participation:Exploit policy changes as instrument to establish causal inferenceRigor of empirical techniques & methodology.

Part II: Empirical Regularities11 Four empirical facts point to the importance of household dynamics:The increase in female labor force participation rates in LAC is largely explained by changes in education and family formation (marriage and children)Gender wage gaps at low income levels are partly explained by family structure (presence of children in HH)Discrepancy in sectoral mobility patterns across occupational states are also mostly explained by family structureFemale headed households have increased in #s overtime and appear to have on average closed the gap relative to male headed households, in terms of wellbeing & poverty measures

Fact 1 : Family & Education matterRS Background Paper: Chioda & Demombynes - Census data for several countries 12Womens education consistently 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 womens educ. levels and changes in family structure (marriage and fertility) emerge as the most important factors associated w/ the rise in FLFP.

Single women with and without children have similar LFP. Married womens LFP more responsive to family formationPresence of additional source of income (spouse) relaxes the budget constraint. A revealed preference argument? Social norms? (Evidence of changing over time)

Fact 2: Gender Wage Gaps13Evolution 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 Fact 3: Transition between formal and informal sectors & family structureRS Background Paper: Bosch & Maloney Rotating Panel Data for Br. Arg. Mx. 14Males experience different transitions and durations than females, but very similar ones to single womenSectoral allocation of women and their patterns of transition vary greatly with family structure.Single women 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, orpossible discrimination against married women who are likely to have children, or who already have children.

Fact 4: Female Headed Households (FHH) RS Background paper Aritomi & Orlando - Census data for several countries 15A 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 VenezuelaFemale 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 poverty among them relative to male headed households (as measured by tests of stochastic dominance), irrespective of the FHH definition Lessons from Descriptive Analysis:16(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 changesWhen causal inference is not feasible, accurate description of trends and new phenomena will be provided: e.g. female headship.

Part III: A closer look at dynamics within the household:17To 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)The role of HH bargaining models & economic outcomes18Transfer 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)

(a.1) Control over economic resources & bargaining powerRS Background Paper: Bobonis & Castro, Oportunidades CCT, Mexico.19Changes 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.(a.2) Control over economic resources & economic outcomesRS Backgrond Paper: Sinha & Montes, Juntos CCT, Peru.20Changes 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) LFPThis 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.

20Allocation of time resources & economic outcomes (1) :RS Background Paper: Lunde and Olinto, Brazil ECD. 21Changes 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 participationFor the sub-population of women who were not previously working, It does appear to motivate them to look for a job.

Allocation of time resources & economic outcomes (2) :RS Background Paper: Bosch & Maloney, Argentina 1985 reform.22Analogously, 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 childrenCarmen P (cite) Also: other evidence from OECD countries.