Segregated Economies in an Integrated World: The Gendered Consequences of Exchange Rate Movements in Low- and Middle-Income Countries

Abstract

I argue that exchange rates are an underappreciated explanation for the significant variation in the extent of female labor force participation in developing countries. Occupational segregation in developing countries is such that women working outside of the home tend to be segregated in labor-intensive export-oriented industries. Consequently, when an overvalued exchange rate increases export prices, it reduces commensurately the demand for female labor. This causes some women to drop out of the labor force. Data from over 150 low- and middle-income countries between 1990 and 2015 support this argument.