Understanding the Macroeconomic Effects of Female Participation in the Labour Market

Abstract

Throughout history, women have struggled to find their place in the labour market. Their participation in the labour market is usually characterised by worse working conditions; they tend to work in lower-paid jobs, under worse social conditions, and in the vast majority of cases their work in the household is not credited. Women make up half of the world’s population, and their non-participation in the labour force has negative consequences for economic growth. Therefore, this paper examines the impact of women’s participation in the labour market on living standard in the European Union. Data on women’s participation in entrepreneurship and politics were also analysed as part of this work. Panel data analysis was conducted for the period 2009–2022 for 27 members of the European Union, using fixed and random effects. The results show that long-term unemployment has a negative impact on GDP per capita. Moreover, a higher share of women in parliament and better education of women is confirmed to be crucial for GDP per capita growth. Failure to include women could have serious consequences for economic growth. The key to success is education and social change that enable women to play the same role as men in the labour market.