The nexus between female unemployment and labor supply: evidence from Arab countries

Abstract

With an emphasis on groups like women who have an elastic labour supply, this study examines the link between unemployment and labour market participation in Arab countries from 1991 to 2021. The bootstrap panel Granger causality method is used to determine the causal direction, considering cross-sectional dependency, slope heterogeneity, and structural breaks. The results provide mixed evidence for the invariance, discouraged worker, and additional worker hypotheses, which qualify earlier findings. Of the 17 countries, only 4 are in favour of the unemployment invariance theory. Policies that raise the growth path of capital, productivity, and increase the effective working-age population may influence the unemployment rate.