The Defeminizing Reversal: Globalization, Industrial Upgrading, and Female Labor Force Participation

Abstract

As countries integrate ever further into globalized production processes, scholars have found significant country-level variation in the extent to which women are able to increase their participation in the formal economy. In this paper, I improve on existing work by disaggregating globalization into its different processes, each of which has different expected effects on female labor force participation (FLFP). I examine how trade, foreign direct investment (FDI), and natural resource exports affect FLFP in a cross-national time-series analysis of 129 low- to middle-income economy countries over a twenty-eight-year period. A major contribution of this paper is to show an interaction effect between trade and FDI: I find that generally trade and inward FDI have a negative effect on FLFP that diminishes as they increase together, suggesting that export-oriented FDI creates more opportunities for women than domestic-oriented FDI and trade openness unaccompanied by significant foreign investment. I also find that the more positive effect of export-oriented FDI depends on the extent to which a country has experienced industrial upgrading, suggesting that gender segregation by industry also affects the extent to which global economic integration creates employment opportunities for women in developing countries.