VIETNAM NATIONAL UNIVERSITY, HANOI INTERNATIONAL SCHOOL GRADUATION PROJECT EXAMINING THE IMPACTS OF GLOBAL VALUE CHAIN PARTICIPATION ON GENDER INEQUALITIES TRAN THI MINH HIEN Hanoi – 2024 VIETNAM NATIONAL UNIVERSITY, HANOI INTERNATIONAL SCHOOL GRADUATION PROJECT EXAMINING THE IMPACTS OF GLOBAL VALUE CHAIN PARTICIPATION ON GENDER INEQUALITIES SUPERVISOR: DR. NGUYEN TRA MY STUDENT: TRAN THI MINH HIEN STUDENT ID: 20070177 COHORT: IB2020D SUBJECT CODE: INS4011 01 MAJOR: INTERNATIONAL BUSINESS Hanoi – 2024 2 ACKNOWLEDGEMENTS This thesis, examining the impacts of global value chain participation on gender inequalities, would not have been possible without the invaluable support and guidance of numerous individuals and institutions. First and foremost, I would like to express my deepest gratitude to my advisor, Dr. Nguyen Tra My, for her unwavering support, insightful guidance, and invaluable expertise throughout the development of this thesis.
Her patience, encouragement, and constructive feedback have been instrumental in shaping the direction and quality of this research. I am also indebted to the International School - Vietnam National University, Hanoi. The faculty and lecturers have not only provided me with a stimulating academic environment but also the necessary resources to complete this research. The knowledge and skills I have gained during my studies at this esteemed institution have been invaluable in undertaking this project.
While I have put in my best efforts, I acknowledge that there may be some accidental errors due to restrictions in exposure and practice time. Therefore, I eagerly look forward to comments, assessments, and recommendations to further enhance the graduation thesis. Thank you sincerely! Student Graduate 3 DECLARATION LETTER I hereby declare that the contents of this graduation thesis are the result of my own study, which was conducted under the scientific supervision of Dr. Nguyen Tra My.
The information and data utilized in the project assure honesty and accuracy, as well as compliance with information citation and reference rules. This statement is entirely my responsibility. Student (Signature and Full name) Trần Thị Minh Hiền 4 LIST OF ABBREVIATION BGVC Backward Global Value Chain Participation ECA Eastern Europe and Central Asia EU European Union FGVC Forward Global Value Chain Participation FVA Foreign Value Added GDP Gross Domestic Product GI Gender Inequality GIIs Gender Inequality Indices GII Gender Inequality Index GVCs Global Value Chains GVCPB Pure Backward Global Value Chain Participation GVCPF Pure Forward Global Value Chain Participation H-O Heckscher-Ohlin ILO International Labour Organization ISIC International Standard Industrial Classification IT Information Technology LAC Latin America and the Caribbean MENA Middle East and North Africa OECD Organisation for Economic Co-operation and Development OLS Ordinary Least Squares SDGs Sustainable Development Goals SSA Sub-Saharan Africa UN United Nations UNCTAD United Nations Conference on Trade and Development UNDP United Nations Development Programme UNESCO United Nations Educational, Scientific and Cultural Organization UNGPs United Nations Guiding Principles on Business and Human Rights UNICEF United Nations Children's Fund VAB Value Added at Basic Prices WDI Worldwide Development Indicators WGI Worldwide Governance Indicators WITS World Integrated Trade Solution 5 TABLE OF CONTENTS CHAPTER 1: INTRODUCTION .1 Reason for choosing the topic .2 Reason for choosing research regions .18 CHAPTER 2: THEORETICAL FRAMEWORK AND EMPIRICAL EVIDENCE .1 Conceptualizing Global Value Chains (GVCs) and Gender Inequality (GI) .2 Ricardian Theory of Comparative Advantage .3 Heckscher-Ohlin Model .4 Implications for Gender Inequality .1 Studies Indicating an Increase in GII (Higher Gender Inequality) .2 Studies Indicating a Decrease in GII (Lower Gender Inequality).1 GVC Participation Data .2 Gender Inequality Data .2 Estimate results in each region .45 CHAPTER 6: POLICY IMPLICATIONS .66 7 LIST OF TABLES Table 3.1: Regression Results of GVC Participation on Gender Inequality Indicators in ECA .2: Regression Results of GVC Participation on Gender Inequality Indicators in LAC .50 Table A1: List of Countries in ECA and LAC region .66 LIST OF FIGURES Figure 5.1: Scatter Plots for the GVC and GII Realtionships of ECA and LAC Region .1 Reason for choosing the topic Gender inequality remains one of the most pervasive and entrenched forms of inequality globally. The choice to focus this thesis on the intersection of Global Value Chains (GVCs) and gender inequality (GI) stems from the pressing need to address pervasive gender disparities that impede socioeconomic development globally.
Despite substantial progress in recent decades, gender inequality remains a significant barrier to achieving inclusive and sustainable growth, with profound implications for individuals, families, communities, and economies. It manifests in various forms, including disparities in education, employment, income, health, and political representation (United Nations, 2020). These inequities are unjust and economically detrimental, as they limit the full potential of half the world's population (World Bank, 2018). Globally, women and girls face substantial challenges in accessing quality education.
According to UNESCO (2021), approximately 129 million girls are out of school, which results in limited employment opportunities and lower earning potential for women. In the labor market, gender disparities are stark, with the International Labour Organization (2020) reporting that the global labor force participation rate for women is 47%, compared to 72% for men. Women are often concentrated in low- paying, insecure jobs, particularly in the informal sector, which typically lacks social protections and job security (ILO, 2020). The gender wage gap is another critical issue, with women earning 23% less than men globally (International Labour Organization, 2018).
This wage disparity is even more pronounced in specific regions and sectors, such as South Asia, where the gap is 30% (UN Women, 2020). This persistent wage gap reflects discrimination and biases in the workplace and contributes to broader economic inequalities. Women's 9 lower earnings reduce their lifetime income, savings, and pension entitlements, perpetuating cycles of poverty and economic dependency (OECD, 2017). Health disparities further exacerbate gender inequality.
Women and girls often have less access to healthcare services, which affects their overall well-being and life expectancy (World Health Organization, 2019). Maternal mortality rates remain unacceptably high in many parts of the world, with Sub-Saharan Africa experiencing a ratio of 542 deaths per 100,000 live births compared to 12 per 100,000 in high- income countries (World Bank, 2021). Additionally, women and girls are disproportionately affected by specific diseases and health conditions, such as HIV/AIDS, due to gender-based violence and limited access to sexual and reproductive health services (UNAIDS, 2020). Gender inequality also extends to political representation and decision-making.
Women are significantly underrepresented in political and leadership positions, holding only 25.6% of parliamentary seats worldwide as of 2021 (Inter-Parliamentary Union, 2021). This lack of representation hampers developing and implementing policies that address gender-specific issues and promote gender equality. For instance, countries with higher proportions of women in parliament tend to have more progressive policies on issues such as childcare, parental leave, and gender-based violence (World Economic Forum, 2020). Addressing gender inequality is not merely a matter of social justice; it also has significant economic implications.
Reducing gender inequality can lead to substantial economic gains. According to a report by McKinsey Global Institute (2015), advancing gender equality could add $12 trillion to global GDP by 2025, and closing the gender gap in labor force participation alone could boost global GDP by up to 35%. Moreover, gender-diverse teams and leadership are associated with better decision-making and higher profitability, with companies with greater gender diversity being 21% more likely to experience above-average profitability, according to a study by McKinsey & Company (2018). 10 The importance of promoting gender equality is also reflected in its centrality to the 2030 Agenda for Sustainable Development, which includes achieving gender equality as a cross-cutting principle across all 17 Sustainable Development Goals (SDGs), with Goal 5 specifically targeting gender equality (United Nations, 2015).
As the global development agenda increasingly coalesces around promoting gender equality, a critical issue is how major economic forces and shifts impact progress on this front. One phenomenon requiring deeper examination is the proliferation of GVCs in an increasingly interconnected world economy. GVCs involve the fragmentation of production processes across multiple countries, driven by factors like falling trade barriers, declining transportation costs, and improved coordination capabilities enabled by the information and communications technology revolution (OECD, 2013). The growth of GVCs is reshaping global trade flows and altering countries' economic structures.
According to the latest data from UNCTAD (2021), GVC participation represented around 60% of global trade flows as of 2021. While GVC participation is often associated with economic benefits like productivity gains, employment generation, knowledge spillovers, and income growth, concerns have also been raised about its potential negative impacts, especially on gender equality and women's empowerment (UNCTAD, 2018). On the one hand, GVC participation could help promote gender equality by creating new job opportunities for women and facilitating their economic and social empowerment (World Bank, 2020). However, critics argue that the types of jobs created in GVC-linked industries may reinforce occupational segregation, with women concentrated in lower-skilled, labor-intensive roles with poor working conditions and job insecurity (ILO, 2016).
Competitive pressures through GVCs could incentivize a "race to the bottom" in labor standards that disproportionately impacts female workers (UN Women, 2017). Moreover, even if GVCs boost overall economic growth, benefits may not accrue equitably to women if gender discrimination persists in opportunities, earnings, control over resources, and societal norms and power structures (World Bank, 2018). Some argue that GVCs could intensify pressures that restrict women's mobility and participation by reinforcing traditional gender roles (UNCTAD, 2018). 11 Empirically, the evidence remains mixed on whether and how GVC participation impacts gender equality in practice.
This ambiguity is reflected in a 2020 survey on Trade and gender by the World Bank, UNCTAD, and World Trade Organization, which found that the relationship is "complex and context-specific" (World Bank, 2020). Given these compelling reasons, it is crucial to explore the factors that influence gender inequality and identify effective strategies to address it. This thesis aims to contribute to this endeavor by examining the role of GVC participation in shaping gender disparities. Understanding how global trade and production networks impact gender inequality can provide valuable insights for policymakers and stakeholders seeking to promote gender-inclusive economic development.2 Reason for choosing research regions A combination of characteristics makes the areas of Latin America and the Caribbean (LAC), Eastern Europe, and Central Asia (ECA) particularly interesting for researching the effects of Global Value Chain (GVC) participation on gender inequality (GI).
Both regions present unique socio-economic landscapes and developmental trajectories that significantly influence gender dynamics. By examining these regions, the study aims to provide a nuanced understanding of how GVC integration affects gender inequality within diverse contexts (UNCTAD, 2020). The ECA and LAC regions encompass a wide array of countries with varying levels of economic development, industrial structures, and sociocultural norms, offering a rich ground for comparative analysis. The ECA region includes countries that transitioned from centrally planned economies to market-oriented systems, such as Russia, Ukraine, and the countries of the former Yugoslavia.
This transition has profoundly affected labor markets, industrial policies, and social structures, creating unique challenges and opportunities for gender equality (UNDP, 2022). The ECA region, encompassing countries with diverse economic structures, political systems, and social contexts, offers a unique setting to study the interplay between GVCs and gender dynamics. This region has undergone significant transformations since the collapse of the Soviet Union, including market-oriented reforms, trade liberalization, and integration into the global economy. 12 In contrast, the LAC region includes a mix of middle-income and developing countries with distinct colonial histories and socio-economic structures.
Countries like Brazil, Mexico, and Argentina have relatively large and diversified economies, while smaller nations like Honduras, Nicaragua, and Guyana face different developmental challenges. The LAC region, characterized by its history of colonialism, structural inequalities, and recent efforts toward social inclusion, presents another valuable setting to investigate the gendered effects of GVC participation. This region has a long tradition of female labor force participation, with women playing a crucial role in various sectors, including agriculture, manufacturing, and services. The LAC region has experienced significant economic reforms and liberalization over the past few decades, leading to increased GVC integration.
However, these changes have also highlighted persistent gender inequalities.