Economic growth and female labor force participation – verifying the U-feminization hypothesis. New evidence for 162 countries over the period 1990-2012

This paper describes how the composition of the labor force changes with economic development. It considers recent trends in women's labor force participation and the type of jobs held in various sectors as national per capita income increases. The paper notes that women are more likely to work in the family or informal labor market if the labor costs to firms exceed the opportunity costs of female labor to family enterprises. Firms are at a relative disadvantage compared with families in the employment of less experienced and less skilled labor, presumably because their labor costs are affected by such regulations as minimum wage, social insurance premiums and limits on firing. In Asia and Africa, an increase in the proportion of employment in firms within the major sectors accounts for most of the rapid growth in women's overall share of wage employment. In Latin America, however, growth in the proportion of firm employment has been slower than elsewhere, and the share of women in wage employment has even fallen overall in several countries. It is not unreasonable to assume that women have lost more than men from market regulations and distortions, but little research has addressed this proposition. If it is true, however, these interventions in the labor market may be responsible for slowing women's transition from nonmarket and family work to firm employment. This in turn may affect the rate and structure of economic growth.

The role of female education is crucial for the development of any country, especially for the third-world countries. The objective of this paper is to analyze the impact of female education and female labour force participation disparities serving as key influential factors of under-five mortality among some selected developing countries in Africa. Annual panel data sets of the selected countries from the year 2000 to 2017 were used for the study. The panel random effect model was used to estimate the polled data for the selected countries. Moreover, the time series multiple regression analysis was used to estimate the predictors of the disparities of under-five mortalities in the individual countries. The study also examined the major causes of the disparities in under-five mortality among the selected countries by emphasizing on female education as major predator of the disparities inter-alia some key control variables such as gross domestic product(GDP) per capita, educational expenditure, female labour force participation, and gross fixed capital. The paper concludes that female primary school enrolment and labour force participation are statistically significant and predominately strong predators of the disparities in the rate of under-five mortality among the selected countries. The study further recommends that health policies to reduce child mortality should be designed inter-alia with educational policies since education makes an individual more conscious about their health. Keywords: Female education; Under-five mortality; Female labour force participation, Education expenditure, Economic growth, Panel analysis. DOI : 10.7176/PPAR/9-3-14 Publication date :March 31 st 2019

Working Paper 2005-18 August 2005 Abstract: This paper determines that the weaker positive pull of education into the labor market and weaker labor market conditions are the observed factors that contributed the most to the decline in the labor force participation rate (LFPR) between 2000 and 2004 among women ages 25-54. As is typical, however, unobserved factors contributed more than any single or combination of observed factors. Furthermore, if the unemployment rate rebounded to its level in 2000, the LFPR would still be 1.4 percentage points lower than it was in 2000. JEL classification: J22, J11 Key words: female labor force participation, labor supply, labor force participation over the business cycle What's Up With the Decline in Female Labor Force Participation? I. Introduction and Background Since the late 1940s the percent of the male population participating in the labor force has been on a steady decline, while female labor force participation has been steadily increasing. Figure 1 illustrates these long-term trends. The decline in male labor force participation has been attributed to a variety of factors. The institution of Social Security in 1935; its expansion to include disability insurance and Medicaid; and the Revenue Act of 1942, which granted tax incentives for firms to establish private pension plans, have been found to have contributed significantly to the decline (for example, see Burtless and Moffitt 1984, Helmuth Cremer, et al. 2004, Gruber 2000, and Lumsdaine, et al. 1997). These policies provided both greater incentives to claim a work-inhibiting disability and to retire earlier from the labor market. Another explanation offered to explain the decline of male labor force participation among all age groups is the increase in female labor force participation. With labor supply decisions often made in a household (husband-wife) setting, the increase in family income from more wives working provides an income effect incentive for husbands to decrease their labor supply. [FIGURE 1 OMITTED] The rise in female labor force participation has several explanations, as well. A major determinant of the increase in labor force participation are the biotechnological advancements that have provided women greater control over and timing of child bearing decisions since the 1940s (see Bailey 2004). This greater flexibility, along with advancements in household technologies (such as the introduction of the dishwasher and microwave oven) have afforded women greater freedom and time to increase their educational attainment, providing yet another reason to devote more time to the labor market (see Goldin 1995). Further, changing social attitudes about the role of women and the appropriateness of women (and wives) to work have increased the job opportunities and, thus, the incentives for women to enter the labor market (see Rindfuss et al. 1996). While the on-going decline in male labor force participation and the long-lived rise in female labor force participation have received much attention over the years, there has been a more recent change in the trend of labor force participation among women since 2000 that begs further scrutiny. Figure 2 plots the change in labor force participation rates between 2000 and 2004 for women across age categories. The figure shows that the decline in labor force participation has occurred across all age groups, except those 55 and older. While the 16-19 and 55+ age groups deserve their own analyses, this paper focuses on the change in labor force participation of those women who comprise the bulk of the female labor force, those 25-54 years of age. (1) These women made up 69% of the female labor force in 2004. [FIGURE 2 OMITTED] The importance of identifying the source of the unprecedented decline in female labor force participation lies in the value of knowing whether the decline is the beginning of a new trend or whether it is temporary and likely to reverse itself. …

The paper contributes by providing new insights into relationship between female labor force and economic growth in 162 world countries over the period 1990-2012. It is anticipated uncovering U-shaped relationship between female labor force participation and economic growth. The analysis is run in two different perspectives – first the relationship is examined for sample encompassing 162 countries; and second – the evidence is disaggregated and the relationship is re-examined in four income-groups (low-income, lower-middle-income, upper-middle-income and high-income). To this aims data on female labor force participation and per capita income are used, from the World Development Indicators 2013 database, and examine the relationship by deploying panel data analysis assuming non-linearity between variables. The main findings support the hypothesis on U-shaped relationship between female labor force participation and economic growth, however high cross-country variability on the field is reported. Moreover, only in case of low-income countries, the U-shaped feminization hypothesis was not positively verified.

Purpose In this study, the relationship between female labour force participation rate and economic growth is investigated in middle-income countries. The study covers the period of 2001–2016 by employing a dynamic panel approach. Pooled Ordinary Least Square and Fixed Effects model estimations are calculated as a decision criterion to select proper GMM Method. The outcomes indicate that the proper estimation technique, which is a System-GMM model, evidences the U Feminisation Theory for the middle-income countries while controlling all other factors. Design/methodology/approach The novelty of this study is that the research not only employs both difference and system generalised method of moments (GMM) estimators but also includes main explanatory variables such as education, fertility, and total labour force rate. The study provides an opportunity to review the U-shape nexus between the female labour force and economic growth while controlling education, fertility and total labour participation rate. Findings The estimation implies that middle-income countries support a U-shaped relationship. The fertility rate does not impact on the female labour force, and education and total labour force level have a positive influence on women's participation in the labour market. Research limitations/implications This study used data that include the period of 2001–2016 for middle-income countries. So, further studies can use different periods of data or different countries. Practical implications The authors emphasise the importance of economic growth for female labour force for middle-income countries. Thus, a country intending to increase female labour force should also focus on its economic growth. As the study points out, middle-income countries staying under the minimum threshold, $4698.15 (per capita), should priorities their economic improvement policies to reach their female labour force participation goal. Those countries also should be prepared for a female labour force participation declining phase until they reach the turning point income level. Social implications Furthermore, education is one of the critical determinants that have an impact on FLFPR. The equal opportunity for both genders to engage in education should be considered as a policy. If females do not have an equal chance to enrolment in education, it may influence the policy of increasing female labour force adversely. Fertility rate appears no more statistically significant in our study. Moreover, today, there are some countries they practise equality between genders by providing equally extended parental leave, which may be a promising policy for gender equality in the labour force and may worth a try. Originality/value Some previous studies may suffer model mistakes due to lack of consideration the endogeneity problem and bias issue of the results as suggested by Tam (2011). Moreover, previous studies tend to choose either studying U-feminisation as excluding other variables or studying determinants of female labour force participation rate as excluding U-feminisation theory. There is not any panel data study acknowledging both concepts by using recent data to the best knowledge of the authors. Thus, the novelty of this study is that the research not only employs both difference and system generalised method of moments (GMM) estimators but also includes main explanatory variables such as education, fertility, and total labour force rate. The study provides an opportunity to review the U-shape nexus between the female labour force and economic growth while controlling education, fertility and total labour participation rate.

PurposeThe purpose of this paper is to examine the themes of relationship between female labor force participation (FLFP) and economic growth, gender disparity in work participation; and to identify the factors which determine females to participate in labor market. The paper uses a framework incorporating a U-shaped relationship between FLFP and economic growth, gender wise wage disparity and economic, social, cultural and other factors which affects FLFP.Design/methodology/approachThematically, the selected literature falls into three main categories: the relationship between FLFP and economic growth; disparity in work participation in terms of male and female wages; and drivers or determinants of FLFP which have been described using international documents and experiences of the different countries. The review closes by identifying gaps in the existing research base and by suggesting areas for inquiry that have been untouched and warrant further research.FindingsThe key findings emerging from this examination of literature show that the FLFP rate exhibits a U-shaped during the process of economic development. Also, there are evidences of gender pay disparity across the sectors which have been justified by documenting a large number of existing literatures. Demographic factors (including fertility, migration, marriages and child care), economic factors (including unemployment, per capita income, non-farm job and infrastructure) and other explanatory variables which include the regulatory context encompassing family and childcare policies, tax regimes, and presence of subsidized health-care for workers determine the FLFP.Practical implicationsThis paper suggests that in order to bring equality in gender pay gap, there is a requirement of replacing the traditional value system. There is need to provide an environment in which women are encouraged and supported in their efforts, in which women have equitable access to resources and opportunities.Social implicationsThis paper addresses the impact of education, culture and child care subsidies on female labor participation. They positively impact FLFP and such a link has not been sufficiently addressed in prior literature.Originality/valueIn contrast to previous studies which document a broad-based picture of female work participation, this type of research deals with the link between economic growth and female labor participation, gender wage disparity and determinants of it which has been largely unexplored so far.

The study investigated the impact of labour force participation rate and its implications on food security, fertility rate and economic growth in the West African Monetary Zone (WAMZ). Using data from 6 countries over the period of 1990 tо 2016 and pool autoregressive dіstrіbutеd lаg (PАRDL) bоunds tеstіng рrосеdurе was employed. The result from the study showed that female labour force participation and health expenditure per capita determine food security and male labour force participation, female labour force participation, gross capita formation, health education per capita and enrolment in secondary education are the variables that determine fertility rate, while male labour force participation, female labour force participation, health expenditure per capita and enrolment in secondary education affect GDP per capita. The study recommended that policies should be directed toward increasing female labour force participation which will compliment male labour force participation as well as increase decent and productive work opportunities for female workers which will promote GDP per capita, leading to reduction in fertility rate and promote food security among member countries. Furthermore, family-friendly policies will further encourage females to participate in the labour market. Therefore, more efforts should be made to promote female labour force participation as the entire WAMZ countries will benefit from the growth and welfare improvement that it will generate. WAMZ countries governments need build their capacity through investment in health and education in order to enhance productivity of the labour force which will lead to economic growth, reduction in fertility rate as well as promote food security. This study has contributed empirically and theoretically to the body of knowledge. The scope covered also makes the study uniquely robust and different from previous ones.

This paper uses 1980 US census tract data from Boston, Denver, Pittsburgh, Seattle, and St. Louis to examine spatial variation between male and female unemployment and labor force participation. Research shows that families and individuals with characteristics making them more prone to unemployment tend to live in central cities. Suburban workers living far from the city's center may also have higher unemployment rates due to higher job search and commuting costs. Female workers differ from male workers by earning less money, working fewer hours, and often, by valuing their travel time to work more highly. This study's variables include age, race, education, language, past migration experience, and occupation. In all of the unemployment equations, the percentage of black and education variables are highly significant. Distance variables are not significant in the overall unemployment equation, but distance is highly significant and positive in the female model: Women's unemployment rates are low for the central city and relatively high for suburban census tracts. Male unemployment is high in the central city, low in the suburbs, and becomes higher again at 10 miles distance from the center. The authors believe that job related information decreases as the worker moves farther from the central city. Labor force participation equations also show significant distance to have a detrimental effect on female participation but a positive effect on male participation. Demanding home roles may constrain womens' job choices; women are twice as likely as men to indicate self-imposed job location and work hour limitations. This paper's results suggest that unemployment reduction tactics such as improving transportation will affect male workers more than female workers, and may affect men and women differently. Continued research needs to consider the enormous increase in female labor force participation and develop economic theories appropriate for 2-earner households.

PurposeThis paper aimed examining the contribution of female labour force participation rate on economic growth in the sub-Saharan Africa during the period of 1991–2019.Design/methodology/approachThe study employed a sample of 42 sub-Sahara African countries using annual data from the World Bank development indicators. The long-run causal effect of female labour force and economic growth was analysed using the Autoregressive Distributed Lag model and Granger causality test for causality and direction since the variables did not have the same order of integration.FindingsThe estimated results indicate that a long-run causal relationship exists between female labour force and economic growth in sub-Sahara Africa and the direction of causality is unidirectional running from economic growth to female labour force. The results also showed that female labour force participation rate negatively and significantly contributes to economic growth (GDP) is sub-Saharan Africa in the long run with an insignificantly negative contribution in the short run hence a liability.Research limitations/implicationsThe author recommends the promotion of women's economic empowerment to encourage female labour force participation to increase economic growth in the entire sub-Saharan region.Practical implicationsThis paper adds to existing literature by using more comprehensive and up to econometric analysis and variables. This paper also makes further recommendation on how female labour force participation can boost economic growth in sub-Saharan Africa (SSA).Originality/valueThis paper adds to existing literature by using more comprehensive and up to econometric analysis and variables. This paper also makes further recommendation on how female labour force participation can boost economic growth in SSA.

Purpose This research investigates the relationship between labour force participation of female and economic growth (U-shaped relationship) in 30 African least developed countries (LDCs). It investigates the factors determining female participation in African least developed countries. Design/Methodology/Approach The study used panel data from 1992-2017 derived from the World Development Indicators (WDI) and International Labour Organization (ILOSTAT). We employed the generalized method of moments (GMM) as the main methodology. In addition, pooled mean group estimations (PMG) and fixed effects models (FE) were estimated as references. Findings The results confirm the existence of the U-shape hypothesis. In addition, female secondary education, wage rate, and gross capital formation determine female labour force participation in African least developed countries. The results were consistent in all models used in this study. It shows that there is a U-shaped relationship between the female labor force participation and economic growth in African Least Developed Countries. Research Implications Our study is the first work which scrutinizes the relationship between female labour force participation and economic development in 30 African least developed countries. Our findings recommend that education skills be supported to be engaged in formal economic activities. Moreover, policy to promote investment and stabilize wage rates should be implemented.

This study inquired into the way socioeconomic, institutional, and digitalization aspects relate to women's participation in the labor force. Making use of the data from 28 developing nations gathered between 1997 and 2022, the Granger causality test and the fixed effect panel estimate method were utilized to examine the relationship between the variables. The analysis results certified that, at low quantiles, women's labor force participation and economic growth uphold a positive but statistically insignificant relationship. In the opposite direction, it was discovered that the impact of inflation on female labor force participation is negative at medium and high quantiles while it is statistically insignificant at low quantiles. Despite being proven to exert a positive influence on the participation of females in the labor force, the model's gross fixed capital accumulation has been determined to be statistically insignificant at very high quantiles. At every quantile degree, it was also detected that the number of women in parliament, the internet use, and urbanization all had a positive impact on female labor force participation. Granger causality studies, on the other side, manifested that there is a unidirectional causality from the internet usage, urbanization and the number of women in parliament to the female labor force. Nonetheless, the findings indicated that there is a bidirectional causality between inflation and the female labor force and a unidirectional causality from the female labor force to gross fixed capital accumulation. It was finally concluded that there is no evidence of a causal relationship between female labor force participation and economic growth.

The increase in income per capita is accompanied, in virtually all countries, by two changes in economic structure: the increase in the share of government spending in gross domestic product (GDP), and the increase in female labor force participation. We argue that these two changes are causally related. We develop a growth model based on Galor and Weil (1996) where female participation in market activities, fertility, and government size, in addition to consumption and saving, is endogenously determined. Rising incomes lead to a rise in female labor force participation as the opportunity cost of staying at home and caring for the children increases. In our model, higher government spending decreases the cost of performing household chores, including, but not limited to, child rearing and child care, as in Rosen (1996). We also use a wide cross-section of data for developed and developing countries and show that higher market participation by women is positively and robustly associated with government size. We then investigate the causal link between participation and government size using a novel unique data set that allows the use of the relative price of productive home appliances as an instrumental variable. We find strong evidence of a causal link between female market participation and government size. This effect is robust to the country sample, time period, and a set of controls in the spirit of Rodrik (1998). (JEL O4, E62, H11)

The loss of womanpower in conspicuous leisure activities, unproductive household tasks, or various forms of "disguised unemployment," which can be seen in every society, is nowhere more evident than in the cities of underdeveloped countries. In urban areas of Egypt, Iran, and Pakistan, for example, less than 15 percent of all women aged 15-64 are in the labor force. In many cities of Latin America and the Caribbean, to be sure, over 30 percent of all working-age women are in the labor force, but from one-third to half of those who work are employed in domestic service. If more effective use is to be made of the potential womanpower in urban areas, it will be necessary both to increase women's work-participation rates and to channel their labor into genuinely productive tasks. The general trends of development of a modern women's labor force, some effects of this development, and some sources of resistance to it are considered in this paper.

The paper contributes by providing new insights into relationship between female labor force and economic growth in 162 countries over the period 1990-2012. We anticipate uncovering U-shaped impact of economic growth on female labor force. To examine the previous we deploy longitudinal data analysis assuming non-linearity between variables. Our main findings support the hypothesis on U-shaped relationship between female labor force participation and economic growth, however high cross-country variability on the field is evident.

The labor force’s active participation is vital for boosting economic growth of a country in the precise direction. The participation of women in the labor force leads to higher living standards and increased aggregate output. Thus, the present study investigates the relationship between economic growth and female labor force participation, by considering economic growth as dependent variable and female labor force, fertility rate, population growth, and gross capital formation as independent variables, with a focus on Sri Lanka by using time series data from 1990-2020 and evaluating the long-term and short-term relationship between the variables through the Autoregressive distributed lag approach. The findings of the study confirm that women’s labor force participation have a significant negative impact on Sri Lanka's economic growth in the long run at the 10% significant level but no relationship between in the short run. Further the Error Correction Term (ECT (-1)) value of 95.56 indicates that the short-term imbalance in economic growth due to external shocks will be corrected every year at a rate of 95.56 and move towards long-term equilibrium. Higher education and potential skills and availability of suitable jobs creating avenues to females increase their participation in the labour market. Hence, policymakers must create strategies to harness the economic potential of women in the workforce.