Women empowerment and insecurity: firm-level evidence

Abstract

Women’s engagement in the formal economy is generally considered an important means to economic empowerment. In many developing countries, however, increasing female representation in politics, their greater engagement in paid work, and equality in educational attainment, are out of sync with the share of female workers in the formal sector's enterprises. This paper hypothesizes the role of insecurity in hampering empowerment that would otherwise accompany such developments. Exploiting the unique trio of a fragile security situation, a positive rate of macroeconomic expansion, and increasing female political representation in Pakistan, it finds a negative link between the ratio of permanent female workers and insecurity in a sample of 1600 formal sector firms. This link also finds support in a much larger sample of 71,000 firms from 71 different countries. The empirical analysis uses fractional logit regression to take care of the peculiar nature of the dependent variable; the issue of reverse causality is handled using instrumental variables.