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Designated sex refers to the sex that a person was interpreted as during birth. This interpretation is often based on prevailing social norms which consider a person as either male or female. This is the sex recorded on birth certificates. It does not consider the sex a person discovers themselves to be upon growing into maturity.
A person's designated sex comes into question in the case of intersex men and women. Intersex people are those who don't really fit their designated sex because of their genitals, physical appearance, and chromosomes among other factors. Medical treatments are undergone, often during their youth, in order make them fit into social expectations of what is male or female.