Who Benefits and How Much? How Gender Affects Welfare Impacts of a Booming Textile Industry

41 Pages Posted: 20 Apr 2016  

Alessandro Nicita

World Bank - Development Research Group (DECRG)

Susan Razzaz

World Bank - Poverty Reduction and Economic Management - Gender (PRMGE)

Date Written: April 15, 2003

Abstract

Exports of textile products originating from Sub-Saharan African countries have grown dramatically in the past decade. Recent trade initiatives, such as the "African Growth Opportunity Act" and "Everything but Arms," along with low labor costs and improved integration into world markets, are giving further stimulus to the growth of the textile and apparel industry in Sub-Saharan African countries.

Nicita and Razzaz explore the extent to which the poor are also beneficiaries of the export-led growth of particular economic sectors, or whether the poor are unable to reap any of the benefits and therefore fall further behind. They use a methodology that combines the matching methods literature (to identify individuals more likely to fill the new jobs of the expanding sector) with the industry wage premium literature (to quantify the gains of the individuals that move into the expanding sector).
The results indicate that a sustained export-driven growth in Madagascar's textile and apparel industry will lead to a substantial increase in the income of poor households, with a consequent decrease in poverty. In a scenario simulating five years of expansion of the textile sector, the authors estimate that more than one million individuals will directly or indirectly receive some benefit. On average, households in which one or more members work in the textile sector get an increase in purchasing power of about 24 percent or US $14 a month. The results further show that benefits are unevenly distributed across male and female workers. Households in which a male member is employed in the textile and apparel industry increase their purchasing power by 36 percent or US $24.5 a month, compared with 22 percent or US $12.2 a month in the case of a female worker.

This paper - a joint product of Trade, Development Research Group and the Gender Division, Poverty Reduction and Economic Management Network - is part of a larger effort in the Bank to study the linkages between trade and poverty.

Suggested Citation

Nicita, Alessandro and Razzaz, Susan, Who Benefits and How Much? How Gender Affects Welfare Impacts of a Booming Textile Industry (April 15, 2003). World Bank Policy Research Working Paper No. 3029. Available at SSRN: https://ssrn.com/abstract=636391

Alessandro Nicita (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-473-4066 (Phone)
202-522-1159 (Fax)

Susan Razzaz

World Bank - Poverty Reduction and Economic Management - Gender (PRMGE) ( email )

Washington, DC 20433
United States

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