Modeling male and female work in a computable general equilibrium model applied to Nepal

This study has two purposes. First, it shows how to analyze gender issues in a standard computable general equilibrium model. Second, it analyses the effects of trade reform on male and female work in Nepal. Our contribution principally concerns the modeling of leisure activities on the one hand, and the links between different CGE models used in policy analysis on the other hand. While previous studies explicitly incorporating leisure activities require data, which is generally unavailable, we use a microeconomic model and alternative calibration procedures to avoid arbitrariness. The experiment conducted in this study shows that trade reform based upon import substitution strategy in Nepal, i.e. a complete elimination of tariffs on imported goods, benefits women more than men in term of income distribution. Women contribute more to household income as their wage increases relatively to men. It appears that the entrance of women into the labor market does not lead to a decrease in the time spent in domestic work, but rather in their leisure time. Furthermore, the study indicates that leisure time consumed by men, which is generally greater than for women, increases with trade reform. Disaggregating labor between male and female workers is relevant when the study has a gender purpose; otherwise, standard models are suitable to analyze the impacts of macroeconomic policy shocks on households. We also found that the welfare gain from tariffs removal is higher in work-leisure models than in a standard exogenous work model. Decomposing gender non-market work time into domestic work and leisure is important when we wish to emphasize the role of women in home produced goods, and to analyze the impact of macroeconomic policies on the well-being of men and women.