Oil and Women's Employment

Ross's argument about the effect of oil on women's employment hinges on how Dutch disease interacts with gender segregation in labor markets to produce low female labor-force participation rates. One of the important effects of Dutch disease is a decline in the traded goods sector and an expansion in the nontraded goods sector. Ross asserts that because women workers are concentrated in the tradable sector and male workers in the nontradable sector, Dutch disease has gendered effects on employment. Since demand for women's labor falls—as a consequence of the contraction of the tradable sector—so do women's wages. Women are thus more reluctant to enter the labor market. In the nontradable sector, which is dominated by male workers, wages increase as a result of the higher demand for their labor. The increase in male wages also affects women's “reservation wage”—the wage that women must be paid to make it worthwhile to enter the workforce. If men earn high wages, then women are reluctant to enter the workforce. Women will only work if they have the potential to earn substantial wages, but since they are concentrated in the contracting tradable sector, such wages will not be offered. This combination of forces conspires to lower women's participation in the workforce.

Let us begin with an examination of the assertion that women's employment is concentrated in the tradable goods sector and men's employment in the nontradable goods sector. Tradables include both manufacturing and agriculture, while nontradables include construction, retail, and many services. Manufacturing plays an important role in Ross's argument, and so the association of manufacturing with women's employment requires some scrutiny. Worldwide, women are a minority of workers in the manufacturing sector. True, employers in many manufacturing industries prefer to hire women, and the employment of women in labor-intensive export industries has received much scholarly attention. But employers in most sectors of manufacturing prefer to hire men. In countries with relatively capital-intensive manufacturing bases, women do not have much of a presence in manufacturing. And even where women do claim a large share of employment in manufacturing, most women work in other parts of the economy, often in the informal sector or in agriculture. Yet Ross's definition of the workforce excludes the informal sector and agricultural jobs. This analytic move is unfortunately not justified. Since his analysis excludes parts of the economy that employ a significant proportion of women, the full extent of oil's impact on women's employment prospects is unclear. For example, one implication of his argument about the contraction of formal-sector employment opportunities for women in oil economies is that women may be forced into the informal sector; their opportunities in agriculture might also shrink, since it is a tradable sector.

What about nontradables? Although I agree with Ross that a large proportion of the construction workforce is not composed of women, I part company with him on retail and other services. The rationale that women will not work in retail because it entails contact with men outside the family is not very convincing because any formal sector job, including those in manufacturing, involves such contact. Even in factories where women are the majority of the workforce, some male workers and supervisors are present on the shop floor, and the commute to work necessarily involves contact with men outside the family. Cultural constraints regarding women's participation in formal sector work, then, should be relatively constant across sectors of the economy, which means that demand for female labor by employers is a crucial consideration.

I agree with Ross that the effects of oil production on manufacturing are extremely important, but the way that gender shapes the demand side of employment is undertheorized in his account. Although Dutch disease discourages investment in manufacturing, some oil producers do develop a manufacturing base. Investments are overwhelmingly in inward-oriented and capital-intensive industries, however, which generate little employment and overwhelmingly hire male labor. Yet when inward-oriented labor-intensive industries expand in this context, they can generate substantial female employment. In Indonesia, for example, an overwhelmingly inward-oriented textile industry was the main engine of job creation in manufacturing during the oil boom years in the 1970s, and women claimed most of those new jobs (even though in Ross's account this should not have happened, since industries that do not face competition need not hire cheap female labor). Women eagerly claimed these formal sector jobs when employers were willing to hire them. In contrast to textiles, the capital-intensive industries that also expanded in the 1970s did not hire women, and so aside from textiles, manufacturing contributed little to women's participation in the workforce.Footnote ¹

One reason women wanted these jobs is that few men enjoyed the fruits of the oil boom. Since oil-intensive growth is capital-intensive and creates few jobs, a minority of male workers actually secure the well-paid jobs connected to it, resulting in high levels of income inequality and, often, high levels of male unemployment. Under such conditions, women do not need to be offered very high wages to entice them into the workforce. In other words, the main constraint on women's employment in oil economies is not that employers do not offer wages high enough to entice women into the workforce but that employers usually do not want to hire women in the first place. Supply factors are, of course, important, but the gendered wage dynamics outlined by Ross are unlikely to be the factor constraining their participation, except when economies are near full employment. The low demand for women's labor is unlikely to change in oil-based economies until they diversify in ways that develop labor-intensive industries, and this usually only happens once oil revenues fall into secular decline.

Toward a Comparative Political Economy of Women's Employment

Given the role that employer demand for gendered workers plays in generating job opportunities for men and women, the question of employers' gendered hiring preferences needs to be examined more carefully. One strength of Ross's analysis is that he takes gender-based labor market segregation seriously. As Ross notes, men and women flow into different jobs in the labor market, and men usually have access to a wider variety of jobs and better-paying jobs than do women. The development of manufacturing has historically been an important route for women to enter the formal labor market, although in contrast to Ross, I would stress the labor-intensive nature of these industries rather than their export orientation, since it is only the labor-intensive stage of export-oriented industrialization that generates large increases in women's employment. The challenge for a comparative political economy of women's employment is to try to explain both the broad patterns concerning where women work and the significant variations across time and space in the conditions and location of the work, and to do so without lapsing into empirically unfounded generalizations about women and the structure of gendered labor markets. In the case of women's manufacturing employment, this means not only analyzing why women are concentrated in labor-intensive industries but also examining why their absorption into these industries is highly selective (i.e., many employers in labor-intensive industries shun women) and varies across time and space, as well as within firms in the same sector.

Economists and sociologists have offered a variety of explanations for women's concentration in labor-intensive sectors of manufacturing. The three most common are strength, wages, and skill, and they often appear together. Women have lower wages than men because of patriarchy or discrimination, or because they are less-educated or less-skilled workers. Since wages compose a large proportion of the costs of labor-intensive industries, these employers are more likely to hire women. However, employers in industries with jobs that require strength, or in industries with jobs that require higher levels of skill, will not be lured by the siren song of women's cheap labor. If a job requires strength, then the employer must hire strong people (men), while in industries with high levels of firm-specific skills, employers are reluctant to invest in the training of women because they will lose that investment when women leave the workforce due to marriage or childbearing. Consequently, women end up in labor-intensive industries characterized by low skill and light work. Employers in protected, oligopolistic, and/or capital-intensive industries apparently do not care about lowering wage costs and, hence, hire men instead of women.

This standard narrative about gender segregation, much of which Ross reproduces, provides a fairly accurate account of where most women work in manufacturing, that is, labor-intensive industries. But on closer scrutiny, a number of problems emerge. If this story is correct, women's employment in manufacturing should show little variation across time and space because women everywhere are assumed to be the same: cheap, weaker than men, and less committed to work.Footnote ² Yet the contours of segregation between men and women in manufacturing change across time, both within and across industries. Industries with similar profiles, for example, labor-intensive exporting, adopt widely diverging gendered hiring practices, both within and between countries. Moreover, some capital-intensive industries actively seek out female workers. Comparative political economists should be able to come up with theories that can explain this variation. Where might a comparative political economist look to explain these differences?

Variations across time and space suggest that important national-level variables explain much of the variation in women's employment in manufacturing. Even among oil producers in the Middle East with similar levels of oil and gas rents per capita, there are sharp variations in women's presence in the workforce (see Figure 3 in Ross's 2008 article). In my work, I have stressed supply factors such as education and fertility, and institutional factors such as protective legislation and the strength of unions, as important intervening variables in explaining cross-national sectoral variations in both women's employment and changes across time within countries. Gender wage gaps also vary dramatically among countries but, interestingly, do not seem to explain these variations in women's share of employment. Employers should be more willing to shift to female labor in cases where they can significantly cut costs by doing so. Yet South Korea, which has one of the largest gender wage gaps in the world, employs fewer women in manufacturing than do Southeast Asian countries, where gender wage gaps are much smaller.

Comparative political economists also need to be careful not to inadvertently import gender bias into our analyses. For example, assertions that jobs require strength and skill are usually assumed rather than investigated, and Ross echoes this assertion in his work. In modern industry, very few manufacturing jobs require strength, and scholars use capital-intensity and/or work tenure as proxies for skill. They rarely interview managers about actual investments in training or compare training times in male-intensive and female-intensive jobs. Feminist scholars have cast critical light on the concept of skill as an objective economic category. These scholars acknowledge that training is costly for employers and that some jobs are harder to master than others, but they assert that designating jobs as “skilled” versus “semiskilled” versus “unskilled” is far from an objective process. They identify two dynamics that lead to the devaluing of women's work. First, employers assume that certain abilities that they associate with being female, such as manual dexterity, are innate qualities that all women possess and, hence, unworthy of monetary reward. The second is that “skilled” male workers will defend this designation in the face of deskilling. Skill categories, then, cannot be taken at face value and should be treated with a healthy dose of skepticism.

Moreover, the skill argument rests on some problematic assumptions about women workers and their commitment to work. When women show little commitment to the labor force, it may be as much a function of industry characteristics as it is of women's reproductive responsibilities. In Indonesia, I found dramatic variations in work tenure across industries. Those that relied on high rates of overtime produced high rates of turnover among all workers, including women. But the textile industry, which usually ran three eight-hour shifts and thus had little overtime, induced much longer tenures, especially among women. The median tenure for women was about 10 years, which compares favorably to men's tenure in more capital-intensive industries.Footnote ³ With an eight-hour shift, women could more easily balance their family and work commitments, which produced longer work tenures. Strikingly, relatively capital-intensive sectors that do hire many women, such as electronics, adopt labor practices that are more similar to labor-intensive firms, which suggests that capital-intensive sectors that hire women will adopt very different labor practices than capital-intensive industries that hire mostly men. Comparative political economists must do more thorough empirical work in order to avoid making faulty inferences about women's labor force commitment and the nature of the jobs that they fill. The conclusions that they draw from these faulty generalizations will be built on a foundation of sand and will collapse when subjected to the weight of more careful empirical scrutiny.

Comparative political economists also need to work harder to integrate gender more fully into our analyses of markets. Most analyses rest on conceptualizations of markets as gender-neutral institutions. They suggest that markets treat women differently not because markets are gendered but because nonmarket forces produce gendered workers with different traits. In other words, it is mostly a supply-side story. Inevitably, the stress is on the way that women's role in reproduction results in lower investments in education and less commitment to the workforce. These studies assume that employers simply respond to these differences, which in turn produces gender segregation in labor markets.

Although these supply factors are important, attributing segregation to nonmarket factors ignores the ways that gender is embedded in the market mechanism and underestimates the tenacity of gender divisions in labor markets, even in the face of dramatic declines in fertility, increases in education, and higher rates of labor force participation. One way to bring gender into the demand side of the market is through gendered discourses of work—ideas that employers hold about the different qualities of male and female labor. Employers believe that having the right gendered worker in a job will result in higher productivity, which is one reason that men and women seldom do the same jobs in a factory, even when they earn the same wages. On the basis of assessments of the gendered character of work on the shop floor, employers use gender as a criterion for recruitment. Gendered hiring practices, in turn, produce the gender division of labor on the shop floor and perpetuate the deep occupational and sectoral segregation that exists all over the world. Once embedded in labor markets, gendered discourses of work shape gendered outcomes in labor markets independently of the nonmarket factors so often highlighted by scholars. In other words, there are characteristics that employers believe are possessed by women workers that are unrelated to their wages but that make them attractive to employers. Consequently, employers may hire women even when there is no cost advantage to doing so, and even when it is more expensive to hire women. When Ross asserts that protected light industries are less likely to hire women because they do not have to compete with foreign firms, he overlooks both the positive features that many employers associate with female labor other than low wages and the many labor-intensive industries that face little foreign competition yet employ massive numbers of women.

I am hopeful that the publication of Ross's work will generate more research by comparative political economists about gender inequality in labor markets. I would like to close by urging political scientists interested in these questions to engage more fully with the work of feminist economists, historians, and sociologists. Much of the nonfeminist work imports gender bias into its categories of analysis, and we should strive not to replicate these biases in our work. One virtue of the feminist scholarship is that it critically assesses these categories, often in empirically rich and theoretically creative ways. An engagement with this work would also help in avoiding inaccurate generalizations about women and in coming up with better explanations for labor market inequalities.