Labour Market Fragmentation and Gender Inequalities: A Warning for Deindustrializing Countries, like Italy, from the Case of Ecuador

The study explores the interconnections of precarious work, gender discrimination, and vulnerability as mutually reinforcing phenomena. To illustrate this connection, we examine the significant case of Ecuador, where the interplay between the prevalence of unregulated jobs, precarious employment, and gender inequalities is particularly evident. We estimate the gender wage gap in Ecuador over the past decade and a half through various working conditions (formal/informal, full employment/underemployment, short-term/long-term, with/without tenure) and personal characteristics of workers (education level, age, presence of children). The findings reveal: a) a persistent gender pay gap, with significant heterogeneity across the different dimensions considered; b) minimal reduction in the earnings disparity between men and women over time; c) an increase in wage inequality among workers exposed to precarious and unregulated jobs. These results highlight the need to address the other side of labour market fragmentation: its connection to greater gender inequalities. They also sound an alarm about the consequences of progressive labour market fragmentation on gender inequality, especially in semiperipheral developed countries facing deindustrialization. In parts of Europe, long-term economic stagnation and the loss of qualified employment are becoming structural issues, presenting challenges similar to those in middle-income peripheral countries. Italy exemplifies these countries, having progressively lost significant portions of its industrial base while pursuing cost-competitiveness strategies and increasing labour market liberalization. In this context, our findings raise a warning about the consequences of labour market fragmentation on gender inequality, a critical issue for Italy. The results advocate for active policies aimed not only at mitigating the negative effects of traditional gender divisions in the family but also at improving labour law enforcement, reducing job precarity, and decreasing worker turnover.