It is assumed that the wage bill shares from a given aggregated sector from the data sets explained before, hold good across the GTAP sectors mapped to this aggregated sector. For example, if male wage bill share were 50 percent of the total wage bill in ISIC sector 1, which is crop and animal production, the male wage bill share in GTAP sectors 1 to 13 is assumed as 50 percent of their sectoral wage bills, based on the concordances shown in the boxes 1 and 2 above. Further, Bhutan dataset does not exist in GTAP, therefore it was split away from GTAP’s composite region named Rest of South Asia, using macroeconomic and trade data from the World Bank in SplitReg tool, to compute shares to separate Bhutan from this composite region. It is also assumed that the gender data in Bhutan may be similar to that in Nepal.

# **4. Description of the Modeling Framework**

The model developed in this paper is an extension of the standard GTAP model (Hertel, 1997). The sets SECT of sectors is defined (indexed by _k_ ) and REG of regions (indexed by _r_ in most cases and if the region is the source of exports/imports but by _s_ if the region is destination of exports/imports).

## **_International Trade_**

The change in imports of each region from each of the others is determined by three factors: (i) substitution among different sources, based on the differential between import prices from specific sources and the sum of import-augmented technical change and aggregate import prices _pimk_ **_k,s_** , multiplied by the elasticity of substitution of imports between the sources **_σM,k_** , using the Armington elasticity for the sector as in the GTAP Data Base, (ii) import-augmenting technical change, _amsk_ **_k,r,s_** , that lowers the effective price of a good in the destination market, and (iii) the import penetration as captured by the change in composite imports of subsector commodity _k_ , _qimk_ **_k,s_** . Note that the substitution effect for a particular flow _(k,r,s)_ increases in divergence of import tariff for good _k_ from regions _r_ to _s_ , from the weighted-average tariff of _s_ . Since a higher weight means lower divergence, this effect decreases in import-shares of region _r_ in the total imports by region _s_ of the good _k_ .

## **For all sectors k in SECT, regions r and s in REG:**

**_qxskk,r,s = -amskk,r,s + qimkk,s -σM,k  * [pmskk,r,s - amskk,r,s - pimkk,s]    ............... (1)_**

Global transport margins are treated in the same manner as in the standard GTAP model, with the quantity of international trade, transport and insurance services required being a fixed proportion of the volume of goods shipped. Technical change in this sector is represented with the variable atmfsdkk **_,r,s_** and is obtained by adding up the changes at different levels, which are directly translated from the aggregate changes in the corresponding variables. Trade and transport services are provided at a common price, _pt_ , which represents a Cobb-Douglas aggregation of trade and transport services exports from all regions in the model. Deducting the rate of technical progress from this price change gives the percentage change in the commodity and route-specific transport margin, _ptransk_ **_k,r,s_** . The price linkages in the model also include export taxes, _txsk_ **_k,r,s_** _,_ export _fob_ 25