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IMF-induced structural adjustment programs and women in Ecuador.

Article Excerpt
Abstract This study examines the affect of IMF-induced structural adjustment programs on several key indicators regarding the status of women in Ecuador. In particular, we focus on the evolution of female primary and secondary school enrollment and female labor force participation in time series data from 1987 to 2003. The analysis is conducted using ordinary least squares regression with corrections for heteroscedasticity. The findings suggest that structural adjustment programs reduced female enrollment in primary and secondary schools and caused a reduction in the reported female labor force participation rate.

Keywords Ecuador. International Monetary Fund. Structural adjustment programs. Women. Primary education. Secondary education. Labor markets

JEL Classification I00.O50

Introduction

A considerable body of literature exists that considers the impact of International Monetary Fund (IMF) Structural Adjustment Policies (SAP) on women in countries adopting macroeconomic reform policies. The reforms are preconditions for receiving financial assistance or adjustment loans from the IMF and subsequently for receiving loans from western banks. IMF loans are tied to strict economic policy conditions thatinclude trade liberalization, export promotion, privatization of state enterprises, and the reduction of government expenditures on social welfare and subsidies.

Many authors have argued that SAPs have adversely affected social conditions in most of the third world where they have been imposed (Bandarage 1997). Moreover, some authors have argued that the effects of adjustment policies have fallen disproportionately on women, affecting their educational opportunities, employment status, and health conditions (Commonwealth Expert Group 1989; Elson 1991; Buchmann 1996; Bandarage 1997; Sadasivam 1997; Saadatmand and Paul 2000). These studies have concluded that SAPs exacerbate women's poverty by limiting access to services, food resources, and employment opportunities.

The funding and availability of education in Third World countries has been adversely affected by SAPs according empirical evidence presented by Reimers (1991), Stewart (1992), and Arnove et al. (1996). Rose (1995) argues that SAPs reduce educational opportunities for women more than for men. Parents react to the opportunity and direct costs of youngsters' education by disproportionately withdrawing daughters from school in difficult economic times. This is done not necessarily because the withdrawn primary-school daughters are required to seek employment, but rather because they replace the domestic household labor provided by mothers who subsequently enter the labor force. As young females forego the opportunity obtain primary education, the long-term effects on their economic well-being will be severe (Rose 1995). This is particularly so in light of Aaron's (1989) finding that, while primary education of both genders has a positive impact on economic growth, female education has higher marginal returns. In an empirical study of Latin American primary schools, Saadatmand and McGrath (2004) find a negative and significant effect of SAPs on female education relative to males, while the effect dissipates at the secondary school level.

The participation of women in formal labor markets is crucial to improving their economic well-being. In addition to earning income, female participation tends to reduce fertility rates and induces additional demand for formal education, both of which further contribute to long-term welfare. However, while much research suggests that structural adjustment programs in third world countries have increased employment opportunities for women, they are typically in labor-intensive, lowwage export industries (Cagatay and Ozler 1995; Sadasivam 1997; Buchmann 1996). In addition, the high concentration of female employment in export sectors is indicative of the loss of preferred jobs in other sectors. For instance, a reduction in public sector employment often associated with SAPs implies job losses for both male and female government workers (Buchmann 1996; Saadatmand and Paul 2000).

This study extends this body of research through an empirical investigation of the affect of IMF-induced SAPs on several key indicators regarding the status of women in Ecuador. In particular, we focus on the evolution of female primary and secondary school enrollment and female labor force participation in time series data from 1987 to 2003. The structure of this manuscript is as follows: the next section reviews IMF activities and how such activities affected the status of women in Ecuador; the next section discusses the model and data; while the last two sections present the results of the empirical investigation and the conclusion.

The IMF and Women in Ecuador

In the late 1980s, Ecuador along with much of Latin America faced massive international debt. In response,...