Women's Changing Participation in the Labor Force: A World Perspective

Abstract

This paper describes how the composition of the labor force changes with economic development. It considers recent trends in women's labor force participation and the type of jobs held in various sectors as national per capita income increases. The paper notes that women are more likely to work in the family or informal labor market if the labor costs to firms exceed the opportunity costs of female labor to family enterprises. Firms are at a relative disadvantage compared with families in the employment of less experienced and less skilled labor, presumably because their labor costs are affected by such regulations as minimum wage, social insurance premiums and limits on firing. In Asia and Africa, an increase in the proportion of employment in firms within the major sectors accounts for most of the rapid growth in women's overall share of wage employment. In Latin America, however, growth in the proportion of firm employment has been slower than elsewhere, and the share of women in wage employment has even fallen overall in several countries. It is not unreasonable to assume that women have lost more than men from market regulations and distortions, but little research has addressed this proposition. If it is true, however, these interventions in the labor market may be responsible for slowing women's transition from nonmarket and family work to firm employment. This in turn may affect the rate and structure of economic growth.