Gender Gaps, Services Trade and Policy Tools to Contribute to Gender Equality

In developing economies, the service sector generates about 55% of national product and half of total female employment. Manufacturing, mining and agriculture account for the rest. Services also account for a significant share of exports, particularly when services that are traded indirectly, through their incorporation in exported goods, are included. Despite its predominance, little analysis has been done so far of the links between trade in services and employment outcomes by gender. This study aims to fill part of this gap.

We provide novel empirical evidence on services trade and key labour market outcomes for both men and women. In general, growth in services exports creates jobs and boosts earnings, whereas growth in services imports is also associated with more jobs, but with lower earnings, more so for women than for men. Greater integration in services value chains has small and ambiguous effects on both employment and earnings.

These findings have important policy implications. Policies aimed at improving gender equality should acknowledge that services trade-linked effects tend to be equally or more beneficial for men than for women, i.e. while women may benefit absolutely from growth in services trade, this does not hold in relative terms. There is no evidence that gender gaps in employment and earnings will become narrower with greater trade openness. Policies intended to boost trade in services should thus be accompanied by inclusive domestic policies, such as labour market and childcare policies, in order to reap gender equality gains from the process.

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