The Impact of Financial Access on Female Labour Force Participation: Evidence from Panel Estimation

Chee-Hong Law,Khai Ying Eng,Yiing Jia Loke

doi:10.47405/mjssh.v6i3.680

Abstract

This paper examines the relationship between financial access and economic empowerment among females, i.e., female labour force participation by testing a panel data of 51 countries ranging from 2004 to 2016. The number of bank branches and automated teller machines, both in thousand square feet and a hundred thousand adults, are applied as financial access indicators. The estimation method employed is the dynamic panel system generalized method of moment estimators. The control variables in the equation are the life expectancy, gross domestic product per capita, and female education enrolment. The results showed that bank branches have more noticeable impacts than automated teller machines in affecting the female labour force participation rate, implying that bank branches' services have a more substantial influence on women empowerment than automated teller machines. Furthermore, financial access indicators show a negative association with female labour force participation, probably due to female discrimination in financial access or the income effect caused by better financial access. Another possible reason is that the development policies could have bypassed women, as indicated by previous studies. To overcome this situation, governments could improve their financial service to ensure that financial access benefits women empowerment, including exploring the microfinance and special loans for female borrowers.

Highlights

Women empowerment is frequently discussed under the Sustainable Development Goals and becomes a critical global challenge
Where LFF is the women economic empowerment that proxied by the female labour force participation rate, LFA is the natural logarithm of financial access indicators
LFA refers to the natural logarithm of financial access, LE refers to the life expectancy, EDUF refers to the fema le secondary school gross enrolment for fema le and LGDPC is the natural logarithm of gross domestic product per capita

Summary

Introduction

Women empowerment is frequently discussed under the Sustainable Development Goals and becomes a critical global challenge. Increasing women's economic empowerment through access and control on valued resources has positive implications on women's well-being and the generation It enhances family planning and reduces gender discrimination in family resource allocation. Financial access could positively associate with the female labour force participation rate by enabling them to launch effective enterprises and reduce dependency on the local moneylender. Financial access and economic development did not always benefit female participation in labour markets unless the opportunities cost of unpaid care work is reduced, higher matching with market work and better gender equality. This paper contributes to the current literature by assessing whether access to finance is useful to boost women economic empowerment This issue has not been explored extensively, especially by using secondary data.

Literature Review

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