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The Evolution of Female Labour Force Participation in Jordan

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The Evolution of Female Labour Force Participation in Jordan The Evolution of Female Labour Force Participation in Jordan Alma Boustati Working paper No. 236 July 2020 The SOAS Department of Economics Working Paper Series is published electronically by SOAS University of London. ISSN 1753 – 5816 This and other papers can be downloaded free of charge from: SOAS Department of Economics Working Paper Series at http://www.soas.ac.uk/economics/research/workingpapers/ Research Papers in Economics (RePEc) electronic library at https://ideas.repec.org/s/soa/wpaper.html Suggested citation Boustati, Alma (2020), “The Evolution of Female Labour Force Participation in Jordan”, SOAS Department of Economics Working Paper No. 236, London: SOAS University of London. Department of Economics SOAS University of London Thornhaugh Street, Russell Square, London WC1H 0XG, UK Phone: + 44 (0)20 7898 4730 Fax: 020 7898 4759 E-mail: [email protected] http://www.soas.ac.uk/economics/ © Copyright is held by the author(s) of each working paper. The Evolution of Female Labour Force Participation in Jordan Alma Boustati* Abstract The purpose of this paper is to analyse the evolution of female labour force participation in Jordan vis-à-vis institutional and economic development. When it comes to institutions, the primary focus will be on family law and labour law. Within the economic development framework, the focus will be on how the social contract motivated the structuring of the economy, labour market, and approach to welfare during three stages of Jordan’s economic development, namely the industrialisation period (1967-1982), the economic bust period (1983-1992), and the economic adjustment period (post-1993). Within each period, the implications of these factors on the composition and size of the female labour force participation is discussed. The findings indicate that a patriarchal approach to welfare, and consequently the low female labour force participation, was sustainable through economic policy which relied on high male wages and high non-wage income achieved through a combination of aid, remittances, and cheap foreign labour. Keywords: Labour; Women; Jordan. JEL classification: J16, J21, N35. * Department of Economics, SOAS University of London. Russell Square, London WC1H 0XG, UK. 1 1. Introduction As of 2016, Jordan had the third lowest female labour force participation rate in the world (WDI, 2019). This becomes puzzling when we look at women’s educational attainment, health, and fertility rate. Gender educational parity has been achieved in the country and women have some of the highest educational attainments in the region; the fertility rate has been on a trajectory of decline for the past 30 years; and women’s life expectancy is high and rising. Economic growth in Jordan has been healthy, averaging 5% per year since 2000 (WDI, 2019), and urbanisation and industrialisation have been in full swing since the 1970s. The purpose of this paper is to describe the history of female labour force participation in Jordan and to infer from it the different factors that may have affected its evolution. It also serves to point out exactly when this ‘gender paradox’ became salient in the country and to provide a contextual understanding of the issue at hand. This exploration concludes that the combination of economic and institutional developments in Jordan repeatedly ‘sheltered’ women from the need to become wage earners, especially women who did not progress beyond secondary education. Whenever demand opportunities arose, women were unable to take advantage of them because of various economic policies that substituted them for other workers. More importantly, a government desire to maintain its end of a social contract that was rapidly becoming unfeasible resulted in a distorted labour market and welfare system which relied on high male wage and non-wage income. This is all underpinned by patriarchal institutions and labour laws and regulations that motivated these economic policies, creating a cycle of reinforcement. This paper is divided into four parts. The first will describe the framework for the analysis. The second will illustrate the ‘gender paradox’ in Jordan and situate it in 1 comparison with MENA and other regions in the world. The third will discuss the gendered institutions in Jordan, namely family law and labour law. Finally, the evolution of female labour force participation vis-à-vis the political economy will be discussed in each of three periods: the import substitution industrialisation policy era (1967-1982); the economic bust period (1983-1992); and, the economic adjustment period (post-1993). 2. Framework Mainstream economic theories have been unsuccessful in explaining the low female labour force participation in MENA and in Jordan. Becker’s (1981) prediction that women’s economic activity would increase with the rise in education and decline in fertility rates did not describe the reality of the MENA region. Neither did the U-shaped hypothesis (Goldin, 1994), which asserts that once industrialisation and urbanisation is in full swing, and women catch up to men in educational attainment, female labour force participation will rise after a period of decline. The anomaly that the MENA region presented prompted researchers to invoke patriarchal culture as the reason for the persistently low female labour force participation. This either took the form of looking at Islam as an inhibitor of women’s work or, when that explanation failed in cross-country studies, claiming that there is an abstract ‘Arab’ or ‘Middle Eastern’ culture that refuses to accept the presence of women outside of the household. These studies tend to be conceptually weak; they merely repeat an obvious truth and claim it is explanatory. There is no discussion in the economic literature of the origin of this ‘culture’, how it translates to lower participation, or why it persisted in MENA alone when in other countries it transformed. According to Karshenas (1997, p. 8): Since the transformation of patriarchal family structures and the emergence of double wage-earning families are only very recent phenomena (a post-World 2 War II development in Western Europe, somewhat earlier in Soviet Russia) it is almost tautologically true that traditional cultures tend to preserve the patriarchal family structures in all societies. Recently, there has been speculation whether the participation of women in the labour force and, therefore, the emergence of two-earner families is indeed as new as previously suggested. Humphries & Sarasúa (2012), for example, revisit the data that gave rise to this misconception and conclude that, for the most part, women did work but their work went unrecognised for various reasons, including the definition of what constitutes work as well as the preconceived notions of officials collecting data, business owners, and workers themselves. Whether this is also true for the case of Jordan is unclear and will be discussed in section 5. Nevertheless, the spirit of the argument remains correct; it is not enough to argue that conservative social norms are the sole reason for inhibiting women from working without also discussing the mechanisms through which they constrain work and the reasons that they are reproduced and remain sustainable. The critique of the ‘cultural’ argument prompted researchers to look at the role of economic policy and structural adjustment in female employment in MENA as this has been salient in explaining the experience of women in other parts of the world such as Latin America and East Asia. Moghadam (2005) takes a feminist political economy perspective where she looks at the gendered outcomes of state policy and redistribution and their implications on women’s work. Ross (2008), on the other hand, suggests that revenue from oil prices is presented as the reason behind the low female labour force participation in MENA, since it encouraged a model of growth that relied on the non-traded sector which, unlike the traded-sector, is not ‘female intensive’. Karshenas (1997) takes a developmental approach to understand the structures of the labour market given modes of production and the gender system. He finds that high 3 wages in the labour market, made feasible by oil rents, allowed the sustainability of the one breadwinner family model. Finally, Assaad (2014a) takes an institutional approach to the low female labour force participation and explains it by invoking the dual labour market in the region that promotes the interest of ‘insiders’ at the expense of ‘outsiders’ who tend to be women and young workers. In this paper, similar to the structural adjustment literature, I will undertake a development political economy approach where I will analyse the interaction between changes in economic policy and institutions and their effects on female labour force participation. When it comes to institutions, I will primarily explore the role of family law and labour law in solidifying the role of women as homemakers or, at best, secondary wage earners. As I will explain, this type of patriarchal institutions is not unique to Jordan or to MENA so the existence of these institutions alone cannot explain the exceptionally low participation. However, with the ‘correct’ economic and political environment the patriarchal form of the family was preserved and, as a result, inhibited women’s work. Within the political economy framework, I will look at how the desire to uphold the social contract over time motivated the structuring of the economy and, in turn, the labour market as well as how it defined the approach to welfare. I will attempt to bring these two aspects together to illustrate how the economic environment inhibited the need for a secondary wage earner and did not provide enough incentive to break away from the institutionalised gender roles. More precisely, I will begin by exploring how the patriarchal institutions in Jordan are manifested in family and labour law. I will argue that they do not severely inhibit the mobility of women nor restrict their presence in the public sphere.
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