Can Apparel Exports Increase Jobs and Female Labor Force Participation?

In the late 1960s, top apparel exporters included the European Union countries; Hong Kong SAR, China; Japan; and the United States—but except in Hong Kong SAR, China, apparel never accounted for a significant share of any economy’s exports. In the 1970s, Korea and Taiwan, China, reached peak apparel export shares and were among the top global exporters through the 1980s and early 1990s. Top apparel exporters from the 1960s and 1970s are now the lead firm economies and key first-tier suppliers in the apparel GVC.

The countries where apparel exports peaked in the 1990s and the 2000s—and some that are still on the rise—began exporting apparel during the MFA years (1974–2005) and are of particular interest. For the economies in the first column of table 4.2 (split into two sub-columns), apparel accounted for at least 5.8 percent of exports over the 40-year time frame (1975–2015). For the economies in the second column, apparel accounted for 2.9–5.8 percent of exports during that period.

What stands out in our results is apparel’s high share of exports at its peak in each economy. Most economies that peaked in the 1990s and earlier had peak apparel export shares below 30 percent. Those peaking in the 2000s were far more dependent on apparel exports, with apparel in several economies representing over 50 percent of exports at some point. South Asian apparel exporters are unique in that all are generally dependent on apparel exports, and apparel’s share of total exports is either still increasing (as in Bangladesh and Pakistan) or remains flat (as in Sri Lanka). But in Cambodia and Vietnam, the apparel share of exports has peaked and is declining.

A 2020 report, Women and Trade: The Role of Trade in Promoting Gender Equality, identifies several ways that trade can improve female labor market outcomes (World Bank and WTO 2020). Given that the apparel industry is both female intensive and labor intensive, one might assume there is a correlation between apparel exports and rising demand for female labor. A simple time-series comparison of female labor force participation (FLFP) rates and apparel export shares confirms this for select countries, such as Bangladesh and Pakistan, from the 1990s through 2017.

STATISTICAL ANALYSIS

Plotting FLFP and apparel share of exports suggests a positive correlation between apparel exports and FLFP (figure 4.3). To test this hypothesis, we did a robust statistical analysis.4 Results show that the t-stat reaches its maximum when the breakpoint dummy is at a 93 percent share of exports. However, the apparel-share-of-exports coefficient becomes positive and is relevant (1 percent statistical significance) when countries reach 82 percent of exports, and the positive effect continues until a 98 percent share of exports (figure 4.4). In other words, apparel exporting has a positive and