InequaliTalks podcast by Clémentine Van Effenterre: Gender Inequality in Peruvian Trade, with Pamela Medina Quispe

In this episode, Pamela Medina Quispe explores how Chinese import competition in Peru negatively impacts women's participation in the labour market. She points to the exposure to competition in the manufacturing industry as a force pushing women into the unstable, informal sector.

How are the job opportunities of men and women impacted by trade liberalization?

Clémentine Van Effenterre, the creator and host of the podcast InequaliTalks, which brings young economists’ research on inequality to the center stage, discussed this question with Assistant Professor Pamela Medina Quispe.

Economists have long studied how trade liberalization impacts workforce segments differently depending on their skills, ethnicities, and gender. Medina’s recent paper with Hani Mansour and Andrea Velásquez, “Import Competition and Gender Differences in Labor Reallocation,” investigated the impact of globalisation on female workers in Peru.

Peru is a particularly well-suited place to study the medium- and long-term impacts of trade liberalization on the jobs of men and women in manufacturing. Unlike other countries like Brazil or Mexico, where the manufacturing landscape concentrates on male jobs, Peru intensively employs men and women. However, the intensity of one or the other heavily varies by industry. Workers employed by the textile industries are predominantly female, while those in the chemical and metals industries are mainly male.

To assess the impact of trade liberalization, Medina and colleagues observe how Peru’s economy reacted to “the China Shock,” widely used in the trade literature. It describes China joining the World Trade Organization in 2001 and, with it, disrupting manufacturing employment in many developing countries. Particularly in Peru, Medina and her colleagues compared changes in workforce participation among men and women four years and ten years after this trade shock.

Four years after the China Shock, the effect was negative for both male and female manufacturing workers. However, after ten years, most men who were displaced from their jobs were absorbed by other industries where women are not generally employed, while women suddenly faced the decision of leaving the labour force altogether or moving into predominantly informal jobs.

This reflects the powerful consequences that gender inequalities can have on women’s life prospects and work conditions. Gender disparities can limit economic opportunities, inhibiting women’s access to alternative formal jobs and confronting them to make more challenging work decisions. Medina and her team are also investigating how these work conditions can influence women’s decisions about when to marry, when to have children, and their family size – “When Women’s Work Disappears: Marriage and Fertility Decisions in Peru.”