Dutch Disease in the Labor Market: Women, Services, and Industrialization

Abstract

The light manufacturing export industries have been the gateway to sustained growth in many newly-industrializing countries. Women have played an important role in those industries. This paper presents a theory linking women's work and industrialization. The theory fits the observation that in low-growth developing countries, women mostly work in household services while in higher-growth developing countries, women work in manufacturing. In the model, the existence of a services equilibrium or an industrialization equilibrium, or multiple equilibria depends on an economy's endowment of land relative to labor.

Keywords: Dutch disease, industrialization, women's employment, service industry, multiple equilibria

JEL Classification: O10, O12, O14