Projection of the Output Cost Arising from Low Labour Force Participation of Women in North Cyprus

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The relationship between gender inequality and economic growth has become one of the most interesting and debated issues both in the academic literature and the policy arena. The aim of this study is to investigate how gender inequalities in the labour force participation (LFP) in North Cyprus undermine the per capita output of the country. Thus, the study is designed to estimate the simulation of a possible increase in per capita GDP based on 2011 data generated by the catch up of north female labour force participation rates to the south for the year 2011. Different age categories for female labour force are considered for the measurement. The age categories distributed within the working age population including female labour force population between the ages 15 and over. The age categories are divided into 5 groups as including the female participants between the age from 15 to 24, 25 to 34, 35 to 44, 45 to 54, and 55 and over. Data used is obtained from the State Planning Organization (SPO) of North Cyprus government for North Cyprus and from the World Bank database for South Cyprus. The North Cyprus labour force participation rates are adjusted to the south as suggested by Bryant et. al. (2004). Parallel to the previous literature, it is found that female labour force participation (FLFP) rate has a positive impact on GDP in North Cyprus. There would have been a 4% higher per capita GDP with the catch up of north to south FLFP rate which might be a substantial contribution towards decreasing the income gap between north and south.