Early-Life exposure to rainfall shocks and gender gaps in employment: Findings from Vietnam

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Abstract

Despite the achievement of gender equity in education in many developing countries, a gender gap still exists with respect to formal employment. Through inhibiting women's empowerment and reducing the supply and productivity of labour, this gap results in poorer development outcomes. This paper examines whether exogenous rainfall shocks experienced in early life explain variations in future formal sector employment outcomes. It does so for Vietnam, a country that is highly vulnerable to rainfall shocks. The paper employs data from the Vietnam Household Living Standards Survey and rainfall data from the Gridded Monthly Time Series Dataset. Findings suggest that rainfall shocks experienced early in life have a long temporal reach by reducing the probability of formal sector employment for women but not for men. Other findings indicate that the gendered impact of rainfall shocks operates through differential effects on educational attainment and that shocks occurring in the first and second year of life are most important.

Introduction

In many developing countries, education attainment levels of girls have increased dramatically relative to boys in recent decades (World Bank, 2012; Klasen, 2017; Evans et al., 2020). The reduction in gender gaps in education has been the focus of international policy initiatives such as the CEDAW (the Convention on the Elimination of Discrimination against Women), which was instituted in 1981 and ratified by nearly all countries of the world (Klasen, 2017). Despite this, women are still greatly under-represented in the formal labour market (Klasen, 2019; Jayachandran, 2020; Klasen et al., 2020). Moreover, among those employed, women are over-represented in the lowest paying jobs (Ortiz-Ospina and Roser, 2018).

At an individual level, gender gaps in employment participation and earnings translate to lower bargaining power in the household (Pollak, 2005; Basu, 2006), which in turn has been shown to lower well-being for women and their children. At an economy-wide level, gender gaps in employment imply foregone labour supply and lower aggregate productivity (Seguino, 2000; Vieraitis and Williams, 2002; Cuberes and Teignier, 2016). Thus, it is important to understand the predictors of gender gaps in employment outcomes and the factors that serve to maintain or exacerbate them. Further, all United Nations’ member states are committed to the achievement of the Sustainable Development Goals by 2030, which include ending all forms of discrimination against women and girls and achieving full and productive employment and decent work for all (United Nations, 2020).

Understanding the factors that underlie gender gaps in formal sector employment is a key motivation for this paper. More specifically, we focus on the question: to what extent can adverse events in childhood divert girls away from joining the formal labour market in adulthood and are there similar long-term effects for boys? The adverse event of interest in this paper are rainfall shocks and particularly those that occurred when children were in-utero and up to age four. We focus on this period because it has been shown to be a critical stage of development (Almond and Currie, 2011; Almond et al., 2018) and we anticipate that the impacts from greater exposure to rainfall shocks during this period may be reinforced over time through the dynamic and cumulative processes underlying child development (Cunha et al., 2010). Overlayed on these general effects, we hypothesise even stronger effects for children from countries where rainfall shocks are common phenomena and are agriculture-dependant. This is because farm-based households often lack access to insurance, savings and credit to buffer themselves against shocks and risk (de Nicola, 2015). We examine the effects for children from a country that is particularly vulnerable to rainfall shocks: Vietnam. For example, nearly a third of the population has already been exposed to floods and approximately 40% of households were dependant on agriculture as their main source of income (World Bank, 2016; Bangalore et al., 2019).

Furthermore, we argue that Vietnam is an important country to focus on because despite making exceptional development progress since the Doi Moi economic reforms of 1986, it still has high rates of gender inequality. According to the World Bank (2020), the labour force participation rate is more than 10% higher for men than women in Vietnam and less than 27% of seats are held by women in the national parliament. Thus, there is clearly much progress to be made in reducing gender gaps in the country, particularly with respect to outcomes in higher-quality, formal-sector employment.

In examining this topic, we speak directly to the large literature examining the impacts of natural disasters on outcomes such as education, health, employment in agricultural-based industries, and risk preferences (Maccini and Yang, 2009; Björkman-Nyqvist, 2013; Cameron and Shah, 2015; Cassar et al., 2017; Mahajan, 2017; Takasaki, 2017; Eastin, 2018; Hanaoka et al., 2018; Ajefu and Abiona, 2019; Marchetta et al., 2019; Saad and Fallah, 2020; Zimmermann, 2020). Many of these studies are based on Asian countries such as Indonesia, Japan, Thailand and India. In general, these studies provide significant short- and long-term results. For example, Björkman-Nyqvist (2013) and Marchetta et al. (2019) show that weather shocks tend to reduce women's educational attainment; Page et al. (2014) and Reynaud and Aubert (2014) find that they can alter financial decisions; Mahajan (2017) finds that they increase wages in specific industries such as in agriculture and Maccini and Yang (2009) find that they reduce socio-economic status. More research is required to understand the effect of adverse early-life shocks on long-term labour market outcomes, particularly outcomes in formal-sector employment.

We make this contribution by focusing on paid employment in the formal sector. Another key way that we contribute to this literature is by looking beyond the causal mechanisms previously identified as connecting an early-life shock to later-life outcomes. For example, the theoretical and empirical literatures often point to mechanisms such as the immediate impacts on early-life health, cognitive and non-cognitive outcomes and parental inputs1 as key determinants of human capital development (Becker and Tomes, 1976, 1979; Becker, 1981; Cunha et al., 2010; Awaworyi Churchill et al., 2020). While these mechanisms are very likely to play a role in explaining the impact of exposure to early-life rainfall shocks on later-life outcomes for all children, it remains unclear why we find significant gendered impacts. A further understanding of the mechanics underlying adverse life events can be an important part of the solution in breaking the under-representation of women in the formal labour market.

Specifically, we examine four distinct mechanisms and specifically explore how their impacts may differ depending on the gender of the child. These mechanisms are: (1) educational outcomes and skills development (school attainment and levels of completed schooling); (2) marriage decisions; (3) migration decisions; and (4) health outcomes. A priori, we expect the first two mechanisms to be important in explaining gender gaps in formal employment because greater exposure to early-life adverse shocks can change attitudes and risk preferences in different ways depending on the gender of the child (Reynaud and Aubert, 2014; Cassar et al., 2017). For example, in a recent paper, Lei and Lundberg (2020) find that disadvantage has a larger (negative) impact on boys than girls with respect to education outcomes during school years. However, this does not translate to impacts on longer term economic outcomes including employment. Hanaoka et al. (2018) show that exposure to the effects of a tsunami serves to increase risk aversion in women but make men more risk-loving.

The last two mechanisms may also explain gender gaps in formal sector employment because parental responses to shocks might differ for girls versus boys. Families that face large credit and resource constraints may be required to consumption smooth across children.2 Combined with the large body of evidence on the prevalence of son preference in some developing countries, this suggests that parents may allocate more resources towards male progeny and away from female progeny in the event of an adverse external shock. Such cultural gender preferences have been shown to translate to inequality of health and other developmental outcomes between genders (Rosenzweig and Schultz, 1982; Behrman, 1988; Sen, 1990; Garg and Morduch, 1998; Oster, 2009; Jayachandran and Kuziemko, 2011). Of course, parental gender preferences may only be one source of these gender gaps and differential treatment of boys and girls may also arise because of differences in need.

Specific to the literature on weather shocks, previous research has shown that lower rainfall years, temperature shocks and drought spells impair child health through the channel of nutritional deprivation and subsequent reductions in birthweight and height outcomes (Maccini and Yang 2009; Tiwari et al., 2017; Asfaw and Maggio, 2018). This is particularly acute for children in developing countries where the high rate of reliance on agriculture-sourced income and the limited credit and insurance markets imply a stronger relationship between weather shocks and food insecurity. In fact, we can confirm that many households in our study source income from agricultural output and that crop yields significantly declined in years when there was excessive rainfall.

Our analysis leverages the random variation of weather shocks (rainfall) and a rich survey-based, nationwide longitudinal dataset. The attraction of examining rainfall shocks is that they are plausibly exogenous to the household traits that influence children's outcomes as well as to gender gaps in outcomes. Thus, relative to an intervention or event where parents can exert influence, the variation in a households’ circumstances that stems from a rainfall shock is better isolated. We demonstrate that the potential confounding effects of selective fertility, migration, mortality and pre-existing neighbourhood differences do not compromise our ability to interpret the enduring labour market effects as stemming from rainfall shocks.

Our main finding is that greater exposure to rainfall shocks has a long temporal reach, reducing the probability of formal sector employment in adulthood but only for women. This gendered impact is echoed in the literature for other realms of life. Our study is most related to previous work by Maccini and Yang (2009), Björkman-Nyqvist (2013) and Mahajan (2017), who assess the impact of rainfall events on gender gaps in socio-economic outcomes for children in Indonesia, Uganda and India, respectively. The main points of departure of our study include: (1) we assess long-term outcomes in paid, formal-sector employment (as opposed to relatively short-term educational outcomes in the case of Björkman-Nyqvist and wages in the agricultural-based sector in the case of Mahajan; (2) we use individual-level data (as opposed to district-level data in the case of Björkman-Nyqvist); and (3) we explore the impact of mechanisms that have previously been given less attention, such as later-life health, migration and marriage decisions. Another unique benefit of our survey is that it is nation-wide and we have access to sibling-paired data. The survey design, combined with the low rates of migration in Vietnam, means that we are uniquely placed to circumvent issues of selective migration and to test the prevalence of the potential issues of selective fertility and mortality.

Our findings advance our understanding of several issues. First, we explicitly explore the outcome of waged employment in the long-term. We demonstrate the long reach of early-life weather shocks may be one piece of the puzzle in explaining employment disparities across men and women in developing countries. Second, we provide insights into the intervening mechanisms that explain how early-life shocks impact on formal sector employment such as educational attainment, later-life health, marriage decisions and migration movements. This is significant because there is little known about the dynamics of decision-making and behaviour during the middle period between childhood and adulthood – a period that Almond et al. (2018) labels the ‘missing middle’.

The structure of the remainder of this paper is as follows: Section 2 provides some background to the Vietnamese context; Section 3 outlines the data; Section 4 describes the methodology; Section 5 presents and discusses the results; and Section 6 concludes.

Section snippets

The Vietnamese context

This section provides a background on the issues in Vietnam that are central to this paper: the country's vulnerability to weather shocks; gendered differences in education; and the economic and policy contexts that might influence gendered outcomes in the labour market. A cursory look at recent data for dimensions of gender inequality is also undertaken in this section.

Located in South East Asia, Vietnam has a tropical climate with a monsoon season usually lasting from May to October. The

The Vietnam Household Living Standards Survey

To investigate the effects of early-life exposure to rainfall shocks on formal employment outcomes later in life, this study employs two rounds of the Vietnam Household Living Standards Survey (VHLSS). The VHLSS is a household survey conducted biennially since 2002 by the General Statistics Office (GSO) of Vietnam with technical assistance from the World Bank. The VHLSS surveys provide stratified random samples, representative at the national, rural, urban and regional levels. For this study,

Baseline specification

To examine the gendered impacts of early-life exposure to rainfall shocks on employment outcomes later in life, we exploit idiosyncratic variation in exposure to these shocks across different cohorts of children born within the same province. As shown in Fig. 3, there is considerable variation in rainfall shock exposure across the different cohorts.

Our reduced form baseline model is specified as follows:Empijct=α+β1Exposureijc,t1+β2genderi+β3(genderi×Exposureijc,t1)+θj+γc+μt+θj×c+εijctwhere Em

Baseline results

Table 2 summarizes the baseline results from estimating Eq. (1). Columns 1 and 2 are for the male and female sub-samples without the gender dummy and the interaction term, and column 3 is for the whole sample. We start with the reduced form regression results in panel A. The coefficient on the exposure to rainfall shocks in column 1 is −0.117 and statistically different from zero at the 1% level. This suggests that, for females, greater exposure to rainfall shocks in early life reduces the

Conclusion

Achieving gender equality, as well as promoting employment and decent work for all, are important development targets as highlighted by the SDGs. Higher rates of formal sector employment are crucial in raising living standards. Yet in developing countries, women's employment is concentrated in the informal sector with no social protection and women are being disproportionately affected by the economic impacts of COVID-19. This paper has examined the gender gap in rates of formal sector

Declaration of Competing Interest

The authors have no conflict of interests to declare.

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