Th e ‘Aft erlife’ of Cheap Labour: Bangalore Garment Female Employment & FEDI Dynamics of Inequality Research Network Workers from Factories to the Informal Economy FEDI Female Employment & Dynamics of Inequality Research Network FEMALE LABOUR-FORCE PARTICIPATION IN IRAN Author(s): Parvin Alizadeh Country Briefing Paper No: 06.17.4 1 FEMALE LABOUR-FORCE PARTICIPATION IN IRAN: A Review of the Literature Parvin Alizadeh Prepared for the Project Dynamics of Gender Inequality in the Middle East, North Africa and South Asia (ESRC Global Challenges Research Fund) London Conference, 9-10 June 2017 Broadly speaking studies concerned with the low rate of female labour-force participation (FLFP) in Iran can be divided into three types, those concerned with (1) culture, state policy and discrimination by labour market institutions; (2) factors affecting the potential supply of FLFP, including the impact of education, fertility, marriage and family structure on FLFP; and (3) high wages arising from the presence of relatively abundant natural resources, ranging from ample reserves of oil and gas to a favourable land-labour ratio. High wages in turn act as an enabling factor to make the absence of women from paid employment affordable for the maintenance of the household based on one male breadwinner. 1. Impact of Culture and Policies The impact of state policies on women’s empowerment and employment in Iran, following the Islamic revolution of 1979, has been noted in several studies (Afshar 1985; V. Moghadam 1989, 1991, 2000; F. Moghadam 1994; Alizadeh and Harper 1995; Alizadeh 2000). As V. Moghadam (2000: 235) noted, “The prolific literature on Iranian women that appeared during the 1980s described an exceedingly disadvantaged position for women in the years following the Islamic Revolution. The implementation of Islamic law placed women in the legal status of minors; new educational and employment policies discriminated against women, and women were all but excluded from the realm of formal politics, which had taken on a masculine and clerical cast.” Afshar argued that Islamization of gender relations after the 1979 revolution – including compulsory veiling for women, the dismissal of all women judges, barring female students from attending law schools, and campaign for occupational sex segregation – was intended to “drive women back to the sphere of domesticity” (Afshar 1985:42). Alizadeh and Harper (1995) showed that Islamization of gender relations was accompanied not only by a sharp decline in female employment over 1976 to 1986 but also by a significant increase in occupational sex segregation. Deploying the Duncan index of dissimilarity, the common index to measure sex segregation, they showed that sex segregation in Iran had increased from 14 percent to 29 percent in 1986, indicating that most occupations by the 1980s were male dominated as the share of female employment in these occupations had declined considerably by the 1980s. In addition to the Islamization of gender relations a few other factors – including the culture of patriarchy, discrimination in labour-market institutions, and women’s own preferences – have been noted to impact female employment. Indeed, Majbouri (2015) argues that these three factors constitute the main determinants of the low female labour-force participation rate in Iran. Using the Household Expenditure and Income Surveys (HEIS) for 2006-2009 to estimate elasticities of participation with respect to wages, his study measures the elasticity of wages on female labour supply to find out the reasons for low female labour-force participation rate in Iran. Although it might appear that women’s participation in the labour market is sensitive to wages, Majbouri writes, this does not conform to the stylized facts on FLFP in Iran. Instead: “Therefore, these lower potential wages are not what dissuade women from participation. There should be other factors on the demand and/or supply side of the labour market that strongly hinder women from participation. On the demand side, low demand for female labour, because of statistical and preferential discrimination, or because of (assumed) productivity differences, could be a culprit. The fact that educated women in Iran are more likely to be employers or self-employed than educated men could be evidence of this low demand for female labour. Another piece of evidence is the high unemployment rate for women (more than 30%). Many studies on countries in MENA confirm that the discriminatory institutions on the demand side of the labour market hinder female participation” (Majbouri 2015:20). On the supply side, Majbouri’s study suggests that two factors – patriarchy and women’s own preferences – might be hindering women’s participation. Decisions and preferences of male guardians of women have strong influence on the rate of female labour-force participation, given that by law, women have to acquire permission from their male guardians to seek employment or accept a job. Also certain women with strong traditional identities do not want to participate in the labour force. A similar conclusion has been reached by Azimi (2015). In his study of the effects of children on female labour-force participation in urban Iran, Azimi uses the Household Expenditure and Income Surveys (HEIS) for 1994-2003 to construct estimates of the effect of fertility on FLFP based on the sex composition of children. Assuming in Iran that parents prefer sons to daughters, the presence of daughters among their existing children could act as a positive inducement to continued fertility. This study found no significant effect of fertility on FLFP in urban Iran. “Oil and gas income along the traditional institutions in Iran are considered to account for the rigidity of FLFP” (Azimi 2015:23). 2. Supply-side Considerations Several studies exist that are concerned with the impact of education, fertility, marriage and family size on FLFP in Iran. The impact of education on FLFP. The prevailing view on education is that it increases labour supply by raising the potential for earning higher income. Education also increases the opportunity cost of domesticity and homemaking for women. Esfahani and Shajari (2012) employ a multinomial Logit model to relate education, fertility and other characteristics of individuals to the probability of participation in the labour market and types of employment. This study is based on official statistical data from 1986 and 2006 (The Statistical Centre of Iran, www.amar.org.ir) for a large sample constituting two percent of the country’s entire population of 25-54 age groups. Controlling for a host of other characteristics, this study find that higher degrees tend to raise the probability of the FLFP rate. It rises by more than 10% with high school education and by another 15% for university education.1 However it is interesting to note that the individual effect of university education does not fully translate into a higher LFP rate and higher employment for the female population (Esfahani and Shajari 2012:6). This might be due to a limited range of available jobs, or intense competition for these jobs causing their expected payoff to fall and hence discouraging women’s LFP. The individual effect “is indeed strong and seems to have wiped out about two-thirds of the impact of tertiary education on the female LFP rate” (ibid.:6). Hence although high school and university education increases the probability of FLFP this potential is only very partially realized due to the limited number of available jobs. Expansion of education only accounts for about 10% of the rise in FLFP (ibid.:1) The study also finds that the decline in fertility has played a much larger role in increased FLFP, accounting for about 60% of the rise in the FLFP rate between 1986 and 2006. Furthermore, and despite the limited impact of education on the FLFP rate, education has played an important role in the decline of fertility, reducing the number of children. In terms of employment categories, the above study maintained that education drives both men and women towards public sector employment. However, the marginal impact of education on men’s probability of finding a job in the public sector is significantly greater than the impact for women. For women the probability of finding a job in the private sector tends to rise with tertiary education. Moreover, their self-employment rises greatly with graduate education. Changing structure of female employment. Bahramitash and Esfahani (2008) provide a more detailed qualitative study of the changing composition of female employment over the period 1956- 2006. In the years before the revolution, women as wage earners were mostly engaged in industrial production. Farming occupations constituted the second category for female employment and professional and technical positions came third. The situation changed significantly after the revolution. “There has been a gradual shift of female employment from agricultural and manufacturing sectors, especially the export-oriented carpet industry, to the service sector, particularly in education, health, and social services” (ibid.:21). Rising education has increased women’s share of employment in professional and technical jobs. This trend is the opposite of the one in several developing countries where economic growth has been the product of cheap female labour in export-oriented manufacturing sector. The study also maintains that, contrary to the prevailing view in the literature, the impact of Islamization on the decline of female employment in the aftermath of revolution has been quantitatively small compared with the impact of disruption in trade (ibid.:21). The decline of female employment was essentially due to decline of private sector jobs, “particularly low-skill ones in rural handicrafts closely connected with the disruption of trade in the aftermath of revolution and Iran-Iraq war” (ibid:1). 1 Women with elementary education are on average 11% less likely to participate in the labour market than those with no education. Bahramitash and Esfahani further argue (p.