Poverty, female labour force participation, and cottage industry: a case study of cloth embroidery in rural Multan.
Azid, Toseef ; Aslam, Muhammad ; Chaudhary, Muhammad Omer 等
It is a well-known fact that cottage industries can play a
significant role in the development of an economy like Pakistan. As it
is observed that this industry is not required too much financing,
imported and highly sophisticated technology. So the problems like
deficit in public finance and balance of payments is not related with
the growth and development of these industries. Simultaneously, high
degree of female labour force participation in this sector has also been
proved in the number of studies. Which seems to be helpful in the
process of reduction of poverty especially in the rural areas.
The Southern Punjab especially its rural areas are comparatively
less prosperous than the other parts of Punjab. A number of female
workers can be seen in the rural areas of Southern Punjab. The
concentration of these workers is in few traditional areas and is
characterised by the low technology and low production levels. These
areas are typically those, which require skills that are basically the
extension of household skills or which reflect a specific educational
and employment experience of women. It has also been observed that
women's income of the rural areas of Southern Punjab are more
likely than their male partners to go towards meeting their
family's basic needs. These women spent most of their business
income on the households, food, clothing and education of their children
rather than reinvesting it in their business.
As can be seen most females are involved in the business of cloth
embroidery. The entrepreneurs of the urban areas are exploiting them so
that the returns remain meagre. The production of these workers have
many folds values in the metropolitan areas and also have high demand in
the Central and Northern areas of the Country. The consumer of these
products belongs to the affluent class.
Unfortunately, such income has not been instrumental in reducing
the level of their poverty. It is therefore, of crucial importance to
find ways to assist these female workers to increase their productivity
and thereby their income.
Keeping this in view a study is conducted in the rural areas of
Multan. This study is based on the primary data. Section I explains the
background of the subject. Section II discusses the economic and social
status of female workers and also measures their poverty level. Section
III gives some statistical estimation. At the end some policy measures
are suggested.
SECTION I
A number of attempts can be seen in the literature related to the
economic theory of the household e.g. Becker (1965) and Gronau (1977)
are the pioneer in the field and discussed time allocation behaviour of
households. However, a vast variety of literature is available which is
based on the empirical studies especially for the developed countries.
Among them the most important are surveys carried by Killingsworth and
Heckman (1986) and Heckman and Macurdy (1980).
Cain and Watts (1973) surveyed the literature about the measures of
labour supply and discussed the basic concept of the subject in detail.
A special case of the family utility function considered in detail by
Cohen, et al. (1970) and by Ashenfelter and Heckman (1974). Among others
Mauser and Brown (1979, 1980) and McElory and Horney (1981) developed
the family economics. Becker (1974,1981) gave the importance of the
marital status in the models of household labour supply. Mincer (1962)
and Mitchell (1980) discussed the added worker effect and discouraged
worker effect in the context of family economics.
Market and non-market activities are discussed by Becker (1965) in
detail and further it is developed by Gronau (1973, 1977, 1973). Cogan
(1980, 1980a, 1981) emphasised the effect of job costs and labour supply
in model of family economics.
Killingsworth and Heckman (1986) surveyed the empirical literature
and divided them as first and second-generation studies. First
generation studies are relying on ordinary least square estimation e.g.
Cain (1066) and Cain and Watts (1973). A distinguished feature of
second-generation models of labour supply is the explicit treatment of
utility function and unobservable variables, e.g. see Amemiya (1973);
McDonalds and Muffit (1980); Goldbager (1981); Greene (1981) and most
important is the work of Heckman (1974, 1976, 1979, 1080). Killingsworth
(1983) has distinguished eight estimation procedures that attempts in
attractive ways to deal with missing wage data for non workers,
In the recent literature Altug and Miller (1998); Cogatay and Ozler
(1995); Klaauv (1996) discussed the female labour supply for the
developed economy. Khandker (1988); Hill (1982); Fong (1975) and Yusuf
and Burgis (19979) discussed the female labour force participation in
the developing countries.
Whereas particular to Pakistan Sultana, et al. (1994); Afzal and
Nasir (1987); Hakim and Aziz (1998); Shah (1986, 1986a, 1975); Kazi and
Raza (1991); Chaudhry and Khan (1987) and Hamid (1991) discussed the
different aspects of the female participation in the labour force
SECTION II
Multan is famous for its clothes embroidery. This business is three
tiers, i.e. final supplier, middleman, and the workers. Most of the
workers are female in the rural Multan in the cloth embroidery. It is
interesting to note that all the suppliers are the shopkeepers and they
have their own stores in Multan city or in the shopping centres of
cantonment. Approximately 60-70 entrepreneurs run their business
successfully in Multan. The main objective of the study is to analyse the economic behaviour of the female workers involved in the business of
embroidery. The data of these workers are collected from the shopkeepers
and from the middleman. An effort was made to approach all the workers
but it was not possible due to certain social constraints. However, a
quite enough number was approached and on the basis of that a survey was
conducted. It was astonished to know that it was for the first time that
such a survey was conducted.
2.1. Profile of the Woman Worker
In this sub section a profile of the typical woman involved in the
embroidery is given.
Majority of the workers informed that they started their work as a
hobby. Presently, they tried to increase their family income, because
the economic condition of their family is not good and they wanted to
fulfil the basic requirement of their family especially the requirements
of the younger members of family.
Table 1 summaries the reasons.
Table 1 explains the reasons of participation in the labour force
and as mentioned above majority of the labour force involved in the
business due to their poor economic conditions. Female participation of
the rural households in the market activities is an important
characteristic of Pakistan's economy. However, both male and female
contribute their labour input in the income of household but males play
a dominant role because of their access to technologies, resources,
output and influence of decision process [Khandkar (1987)]. But one
cannot ignore the market activities of women. In reality their income is
a supplement to the family and mainly it is consumed as the complement
of the consumption of the family.
In the production of cloth embroidery cloth they only supply the
labour. Whereas cloth and other inputs are supplied by the traders and
the middlemen
Table 2 shows that how much time they allocate to market and
non-market activities.
The majority of the workers allocate their time to the more
non-economic activities than to market activities. In return they are
not able to earn more. Kottis (1990) and others have argued that the
decision of woman to participate in the labour force can be considered
as the output of the decision making process of the household to which
she belongs. How to allocate their time between work and home, working
the market and leisure is based on the combined household utility. It is
also assumed that time saving devices such as microwave oven, washing
machine etc has positive effect on the female labour force
participation. As it is observed from Table 2 that majority of female
workers those involved in the cloth embroidery are given more time to
non-market activities which confirms the hypothesis of nonavailability
of time saving devices. It is well known factor that in the rural areas
of Pakistan these devices are not commonly used especially in the poor
households.
2.2. Demographic Profile of the Workers
Table 3 depicts the demographic profile of the female workers in
the business of embroidery. Most of the workers are not educated.
Majority of them are falling in the age group of 16-30. This table also
shows the social behaviour of Pakistan's society. Because in most
of the poor families the women are not attending the school and the
prevailing customs are also not in the favour of female education. May
be this is the one of the reason that 79 percent female workers in our
sample have obtained only primary education. Only 7 percent are
matriculate or above. It is observed from the age segment that majority
of women supplying labour force are between 16-30 years of age. It may
be due to the family structure of rural as well as the urban areas of
Pakistan. The growth of the family increases the responsibilities of the
housewives/mothers so this phenomenon does not permit most of the women
to supply labour for market activities. It has also been observed that
in the rural areas of Pakistan after the middle age the women are not in
the good health so due to this they are not in position to perform the
work of embroidery. It may be one of the causes of low labour supply in
this cottage industry after the age of 30. In the age segment (30-60
years) only 22 percent are supplying their labour for embroidery. Most
of the workers supplying labour in this cottage industry are not well
educated. Here may be psychological phenomenon is working that more
educated women are not considering it as normal good. Here substitution
effect says work less in embroidery because they can earn more from the
alternative sources e.g. home tuition or jobs in the formal and informal
sectors etc.
53 percent of the worker's families are living below poverty
line (the National poverty line is used for this measure). Only 5
percent of worker's families are having per capita income more than
Rs 700. Work experience gives another dimension of the analysis. It is
astonished to know that workers having experience more than 15 years are
only 12 percent. May be one can conclude that most of the workers are
not able to work for the longer period, due to cultural, social and
other reasons. The results also suggest the similar reasons as we have
been discussed for the age of the workers.
Table 4 depicts the per capita income (excluding the worker's
Income) of the worker's family. It shows that with the earning of
these workers the poverty level of their families reduces. 77 percent
are falling under poverty line instead of 53 percent whereas the last
segment is showing the same 5 percent. It is remarkable to note that how
their earnings are contributing in the welfare of the household. This
implies that labour supply function of the family member depends not
only on his or her but also on the labour and non-labour income of the
family.
It is argued in the different studies that number of children is
also played a significant role in the participation of female in work,
especially children under 5 years of age. It implies that looking after
a child and earning of mother are substitute of each other.
Approximately 40 percent of the female workers are having children
less than five years of age, and they allocated less time to work and
more to home. Some social factors like family system (nucleus or joint),
Purdah (veil) and the distance from the market are also have their own
impact on the female labour force participation. (Their statistical
impact will be discussed in Section III.) However, approximately 93
percent of total workers in our sample are Purdah observing, whereas
more than 60 percent are living in a joint family system. Most of them
are complaining about the distance to a town or market centre. An
increase in the household distance to the market centre means a higher
transaction cost for market purchased goods and also higher for
employment.
These may imply a decrease in the probability of women's
participation in the labour force.
Table 5 describes the areas in which women working in the industry
of embroidery are facing obstacles. Due to imperfection in the market
they have less information and limited bargaining power. Social setup is
a main obstacle in their mobility. Majority was complaining about the
behaviour of the middleman. However, most of them seemed to be helpless
and were not optimistic about their own future. It is observed from the
survey that these workers are very much neglected. They are neither
being supported by the government nor by the society.
SECTION III
This section is based on some statistical estimation of the female
supply of labour in the sector of embroidery in Multan. The results were
obtained using the OLS (Ordinary Least Squares, for detail see Table 6).
Another motivation of this exercise is to test the hypothesis that
a family in the rural society like Pakistan will send its female members
to the labour market only if the family's income drops very low.
(1)
The estimated coefficient of the poverty variable is strong and
statistically significant. This shows that these workers play a great
role in pulling the households out of poverty. The co-efficient of
age-squared variable is insignificant suggesting a linear relationship
between women's labour hours and age. However the sign of variable
is negative. May be the older women are likely to spend time in unpaid
domestic work (which have not been considered in this study). Workers
living in far off areas work fewer hours than their other counterparts.
Without exceptions hours of female workers respond positively to
their income. It is very interesting to note that number of male adults
in the family has negative impact on the supply of labour hours. This
phenomenon has both substitution and income effect. Traditionally in the
rural areas the presence of male adults increases the family income and
simultaneously their presence increases the unpaid domestic work of
female members. This phenomenon can be explained as market determined
prices are the wages of two categories of labour, adult male and adult
female. An increase in the male wage rate will induce an increase in the
supply of male's labour to market work. This will induce a
corresponding decrease in the female's time allocation and
participation in the market work, if male and female are substitute.
It is assumed that children under 5 years of age have a negative
impact on the women labour supply. The estimated co-efficient of this
variable is statistically insignificant. May be this effect is due to
the family structure of the rural areas of Pakistan. This can be
interpreted as if the children and mother are the substitute in
production, it implies that the children can substitute the
mother's time in work at home, thus releasing the work for market
work and vice versa [see Khandkar (1987) for detail].
The co-efficient of Purdah is not statistically significant,
because the nature of embroidery work is different from other fields and
it is domestically based so in this respect the role of Purdah is
negligible.
Furthermore, educational level, which is another individual
characteristic, can be treated as an explanatory variable that may
indicate productivity potential, both at home and in market production.
Holding wages constant, an increase in the level of women's
education can increase the probability of women's participation and
time allocation in the market production if it increases the opportunity
cost of staying at home. This may also imply an increase in women's
time allocation in home production of education increases her home
productivity. Thus, the ultimate effect of an increase in women's
education level is indeterminate. Considering above, in this study four
variables for education are used to estimate the effect of education on
the women's supply of labour in this cottage industry. It is
observed that up to middle standard (8 Years schooling) has a positive,
strong and significant effect whereas after that it has insignificant
effect. As it is expected, in the rural areas of Pakistan, with more
education female have more opportunity or may be they spend more time on
further education than work. Or it may be, as explained in the Section
II becomes a low task job. Joint family system also has a positive
impact of hours supplied.
CONCLUSION
This study purposes and applies a simple test of the hypothesis
that there is a positive association between hours of female workers and
household poverty. This is amended form of luxury axiom by Basu and Van
(1998). It is based on this idea that in the traditional society the
women are working for market activities, only if the income of the
family falls to very Low level.
Determinants of women's work pattern in this cottage industry
need to be identified for the public policy, programmes that seek to
improve the well being of the rural population. There should be a solid
programme from the government for the protection of these workers. This
cottage industry is not well known but has enough shares in the business
of Multan. Its production is not only consumed domestically but it has
also share in the exports markets especially these products are exported
to Far East and Europe. So this is the need of time to develop this
sector in an organised way. Female labour force in this sector is
observing a number of economic and social obstacles. An effort should be
made to minimise these obstacles.
This problem has two dimensions, i.e. to improve the status of
female workers and incentives should be provided to them. Other is to
develop this sector on the priority basis for the economic and social
development of rural sector and as well as for the enhancement of the
foreign exchange.
Appendices
APPENDIX A
History of Embroidery
Multan is known for its cultural heritage. Embroidery is one of the
famous cottage industries of this area. In the beginning this industry
did not get the proper recognition as the market of embroided cloth was
restricted to Metropolitan cities and some parts of Northern Areas. But
now due to the interest of local entrepreneurs this cloth is being
exported to Middle East, Indonesia, England, and Italy and USA.
Process of Embroidery
* Purchase of Raw material (Like cloth, thread etc.).
* Designing.
* Handing over of material to female workers.
* Preparation and Cross Check.
* Peco.
* Washing and Pressing.
Process of Production
If cost is Rs 120 than
* Cost of Middle man = Rs 10.
* Cost of thread etc paid by middle man = Rs 15. (intermediate
inputs are provided by the middle man).
* Payment to Workers = Rs 50.
* Other Expenditures (transportation etc.) = Rs 05.
* Total Cost of final product = Rs 80.
* Cost of cloth = Rs 40.
* Price in the market is Rs 180 to Rs 200.
(If a person gives 5 hour a day to one dupatta, than he or she will
prepare it in 3 days it means they are spending 15 labour hours on one
piece and getting Rs 3.5 against each labour hour.)
The data of workers were compiled from the producers of the
embroidery cloth and from middleman. They are called agents. Most of the
agents are female. Then applied the simple systematic random sampling on
the basis of households. If there is more than one worker in an
household than one is selected randomly through predetermined methodology. In most of the households more than one worker are
observed.
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(1) This is based on the Basu and Van (1998) 'luxury
Axiom'.
The comments on the paper were not received in time for press. Ed.
Toseef Azid is Professor of Economics, Bahauddin Zakariya
University, Multan. Muharamad Aslam is Director Development,
Commissioner Office, Bahawalpur. Muhammad Omer Chaudhary is Lecturer,
Department of Economics, Bahauddin Zakariya University, Muttan.
Table 1
Reasons to Participate in the Labour Force
Reasons Percentage
Economic 70
Hobby 10
Because of Friends 15
Tradition 05
Source: Data collected by the authors in their survey.
Table 2
Sharp of Market and Non-Market Activities
Market Non-Market
Less than 10 Percent 8 hours/day 2-4 hours/day
2 Percent 6-7 hours/day 4-6 hours/day
40 Percent 4-5 hours/day 6 hours/day
30 Percent 3 hours/day Approx 8 hr/day
Source: Data collected by the authors.
Table 3
Demographic Profile of the Workers
Age
16-20 Years 20%
20-25 Years 30%
25-30 Years 28%
30-40 Years 15%
40-60 Years 7%
Education
No Schooling 42%
Primary 37%
Middle 14%
Matric and Above 7%
Family Income (Per Capita)
Less Than 500 53%
500-600 22%
600-700 20%
Above 700 5%
Work Experience
Less than 5 Years 22%
5-10 Years 48%
10-15 Years 18%
Above 15 years 12%
Source: Calculated by the authors on the basis of Survey Results.
Table 4
Monthly Per Capita Income of the Families, Excluding
the Worker's Income
Less than 500 77%
500 to 600 12%
600 to 700 6%
Above 700 5%
Source: Calculated by the authors on the basis of results of Survey.
Table 5
Maier Obstacles Observed by the Female Workers
Limited Bargaining Power 62%
Limited Mobility 79%
Male Dominated Market 67%
No Protection from Government 83%
Exploitation from the Producer 85%
Distance from the Market 92%
Middle Man 94%
Lack of Information 66%
Low Wage Rate 100%
Source: Calculated by the authors on the basis of results or
their survey.
Table 6
Regression Estimation of Female Labour Supply
Total Number of Hours
Dependent Variable Supplied by the Female
Workers for Embroidery/Weak
Constants: 22.73 * (2.97)
Independent Variables
Workers' Characteristics
Age 29.49 * (6.82)
Age (2) -3.27
Income 39.46 * (7.93)
Education A 18.79 * (12.38)
(1 if no Schooling, 0 otherwise)
Education B 16.92 * (12.95)
(1 if Primary, 0 otherwise)
Education C 17.79 * (10.29)
(1 if Middle, 0 otherwise)
Education D 7.38 (1.38)
(1 if Matric and above, 0 otherwise)
Family Characteristics
Poverty Status 48.31 * (7.69)
(1 if below Poverty Line, 0 otherwise)
Number of Children (Below 5 Years) 32.24
Number of Male Adults -3.07 * (3.28)
Gender of Household Head 7.32 (1.63)
(0 = Male, 1 = Female)
Age of Household 6.04 (1.39)
Family Structure 7.22 * (8.97)
(1 if Joint, 0 otherwise)
Income of Household Head -8.98 * (6.35)
Social Characteristics
Distance from the Market -2.73 * (2.94)
Purdah 3.68 (1.29)
(1 if Purdah Observing, 0 otherwise)
[R.sup.2]= 0.79
F = 14.92 *