Labor Force Participation of Women and the Sex Ratio: A Cross-Country Analysis

Abstract

The well-known relationship between the sex ratio (the ratio of men to women in the society) and women's force participation rate has been widely interpreted to be the result of women's poor prospects when fewer potential partners are available. In this view, frequently referred to as the squeeze it is therefore the sex ratio, the number of men for every 100 women, that is the cause, and women's entry into the market that is the effect. There is no doubt that a low sex ratio results in a larger proportion of single women and that these women are more likely to work for pay than wives. It is the broader conclusion of the marriage squeeze hypothesis, that women will be highly prized as wives and mothers and treated better when the sex ratio is high, that deserves critical examination. There is, in fact, a growing body of evidence showing that women, including wives and mothers, will be valued more and that their life chances will be better when they are economically active outside the household. Building on this research, and going beyond it to examine its implications, we propose what may be termed the labor force participation hypothesis, which views women's force participation as one of the determinants of the sex ratio. We begin by briefly summarizing the reasoning on both sides. This is followed by presentation and analysis of relevant evidence, and, finally, our tentative conclusions about the relative merits of the two hypotheses, including the suggestion that they may be complementary.