National Income, 2017

That said, significant evidence is emerging that suggests that apparel employment can be associated with female empowerment. But whether it represents a transition from jobs to careers has not been explored.

THE “FEMINIZATION U HYPOTHESIS”

Economic development is closely related to female empowerment and specifically to labor participation. Since the 1960s, numerous researchers have stylized the “U-shaped” pattern found between female labor force participation (FLFP) and development (as evidenced by GDP per capita). Figure 1.2 illustrates what is now often called the “feminization U hypothesis”—that is, that FLFP first declines and then rises with the socioeconomic development process (Sinha 1967; Goldin 1995).

FLFP rates are high in poor countries because of the share of women engaging in subsistence activities, especially certain types of agriculture, as paid or unpaid workers on family farms. As countries industrialize, FLFP rates fall in middle-income countries, and the upward slope is characterized by growth in services, which opens opportunities for women and is accompanied by declining fertility rates and expansion of education for women.

FIGURE 1.2 Incidence of the U-Shaped Relationship between FLFP and National Income, 2017

100

80

FLFP (%) 60

40

20 KHM

VNM

PAK BGD

EGY LKA TUR US

0

5 6 7 8 9 10 11 12 Log of GDP per capita (current US dollars)

Sources: International Labour Organization model estimates and World Development Indicators data. Note: The data cover 176 countries across all regions and income groups. The polynomial trend is not the best trend, because of outliers. ISO alpha-3 codes designate the seven case study countries: Bangladesh (BGD), Cambodia (KhM), the Arab Republic of Egypt (EGy), Pakistan (PAK), Sri Lanka (LKA), Turkey (TuR), and vietnam (vNM). FLFP = female labor force participation; ISO = International Standards Organization; uS = united States.

The history of women’s employment in early-developing economies, such as the United States, follows the same pattern (Goldin 1995). Whereas the downward portion of the curve is related to an income effect suppressing women’s formal labor market participation, the rising portion is explained by a predominant substitution effect.

Directly related to rising GDP per capita, Goldin argues that the expansion of education—specifically secondary education—was one of the most important triggers of sustained female labor inclusion and the occupational changes that later allowed women to transition from jobs to careers. The significant increase in secondary education during the first decades of the 1900s explains the upward portion of the curve, because it allowed women to have better-paid jobs, increased the cost of staying at home (substitution effect), and opened the doors to clerical occupations. In other words, the transition from jobs to careers seems to parallel the evolution of FLFP, according to the feminization U hypothesis.

However, the existence of this U-curve is increasingly debated. Many studies emphasize data issues with labor force surveys that make measurements of FLFP difficult and inaccurate (Gaddis and Klasen 2014); identify many countries that do not follow this pattern (Verick 2018); and suggest other significant factors that affect FLFP (Klasen 2019).

Moreover, a recent study points out that the relevance of the U-shape varies with country income, being (a) greater in high-income countries; (b) somewhat weaker in upper-middle-income countries; (c) not consistently found in lower-middle-income countries; and (d) not found at all in low-income countries, which have a reverse U-shape (Lechman and Kaur 2015). The study also points to high variability in the FLFP rate across countries in the same income groups or regions—which might reflect not only economic growth but also a wide array of legal, cultural, and social factors or the complexity of structural changes. This finding suggests that the U-shape was a more common development trajectory for countries moving from low to high income in the early twentieth century and may no longer be the norm. Several other explanatory factors are discussed in box 1.1.

What is relevant for this report is that although the U-shape mainly portrays a relationship between FLFP and national income, it is also closely related to the jobsto-careers trajectory. Chapter 3 shows how, on a global scale, the distribution of female employment by sector follows the same U-shaped pattern, and thus the availability of low-, mid-, and high-skill occupations varies as country income rises. In fact, the distribution of employment across industries and occupations is one of the indicators that Goldin (2006) analyzes to explain the transition from women seeking jobs to women seeking careers in the United States. We take a similar approach to analyze whether the growth in apparel exports a decade (or more) ago is associated with the transition from jobs to careers, using four additional indicators: (a) investment in human capital, (b) marriage and FLFP, (c) lifetime FLFP, and (d) gender earnings gap.