Low Labor Force Participation Research Articles

Role of Women in Inclusive Growth and Sustainability: An Indicative Study

The economic face of gender inequality is not new; it existed in extreme forms and manifestations in the past also. Over the years, gender inequality has been translated in several forms, which include invisibility, glass ceiling, pink ceiling, wage gap, hindrances in career growth and access to capacity building. The developed world is also struggling to address issues of gender inequality and sustainable economic growth. Countries that have overcome this, are on high growth trajectories. Pakistan poses a dismal picture, low female labor force and economic participation remains a major contributor to Pakistan's low GDP. The issue of economic gender parity, if addressed, can therefore become a catalyst for Pakistan's future growth target. The acknowledgment of women's contribution to the society is undervalued. In addition, the proportion of women in informal sector is higher than in formal sector of economy. Thus, women are not showcased in inclusive growth and sustainability paradigms. Marriages, societal constraints, mobility issues, security situations, lack of encouragement of entrepreneurial start-ups, insufficient exposure to decision making roles and poor awareness about career growth are some of the factors that impede women's contribution to inclusive growth. The consensus is to increase women's visibility, participation and access, create equal opportunities and nurture a healthy work environment. This research attempts to contribute to the intellectual discourse through an indicative study in an urban setting, an indicative survey and interviews were conducted to ascertain the current mindset and status of women in workforce and their contribution to economic growth and sustainability. The sample size is 100+ females who have completed higher education degree in the last ten years. The hypothesis is backed by the Feminist Economic theory which demands wage and role equality in economic policy making and also questions division of labor at homes and in societies.

Long Term Effects of in Utero Exposure to 'The Year Without A Summer'

This paper uses the aftermath of the great Tambora eruption in 1815 as a natural experiment to explore the long-term effects of a nutritional shock during prenatal development. The volcanic explosion of Tambora formed substantial ash columns which hampered sun light, cooled down the surface temperature, reduced the length of the growing season, and led to a severe harvest failure during summer and winter of 1816 in Europe and northeastern states of America. US decennial censuses 1850-1880 provide evidence that cohorts in utero during the climate anomaly revealed lower literacy rates, lower labor force participation rates, fewer number of own children, and higher female-male ratio. The results are confirmed among the same cohorts in England, Canada, and Norway. 1851-1881 Decennial censuses of each country indicate negative effects of exposure during prenatal development on labor market participation rates in adulthood.

Labor Force Transitions by Gender: Implications for Separate and Combined Worklife Expectancy

Abstract The Fair Calculations in Civil Damages Act of 2016 (the “Act”) proposes that tables of worklife expectancy not taking account of gender be used in the calculation of damages amounts for loss of earnings capacity. This study calculates worklife expectancy tables not taking account of gender, by taking weighted averages of the labor force transition probabilities used by Skoog-Ciecka-Krueger (2011) and calculating the resulting worklife expectancies using the method of Skoog (2002). The weights for the weighted averages are from the period January 2005 through December 2009. This study then examines patterns in worklife expectancies and labor force transition probabilities and provides evidence not in support of the hypothesis that women's lower worklife expectancies are due to events limited to childbearing years. It is seen that at almost all ages and at all levels of education: women's rate of departure from the labor force exceeds that of men, women's rate of entry and return to the labor force is less than that of men, and labor force participation rates are less than those of men. This study finds that women's lower labor force participation rates than those of men are accounted for by a greater incidence for women of the statuses “taking care of house or family” and “in retirement.” Combined gender worklife expectancy tables are then applied to the total population, with the result that mean worklife expectancies are higher for women than men at ages 30 and under, and progressively lower for women than men as age increases beyond age 30.

Comparing Labor Market Trajectories of Refugee Women to Other Immigrant and Native-Born Women in the United States

ABSTRACT Even as the world has witnessed an unprecedented number of displaced individuals, resettlement of refugees has been met with fears about their ability to integrate into host economies. Such fears are compounded by the limited information on the long-term economic outcomes of resettlement. This study uses American Community Survey data to explore the labor market integration of refugee women resettled in the United States over the period 2002–16. It finds that, over time, refugee women tend to surpass the labor force participation (LFP) rates of native-born and other immigrant women in the US even after controlling for individual characteristics like level of education, English proficiency, and home country LFP. This indicates that refugee women are able to adapt and make positive contributions to the host labor market and strengthens the case for expanded refugee-resettlement programs in developed economies. HIGHLIGHTS The charged political debate in many developed economies about integrating refugees into economic and cultural life is often based on unfounded stereotypes. Gendered labor market outcomes of resettled groups are important to investigate since these outcomes have influenced other immigrant groups’ assimilation experiences. Though resettled refugee women in the US start with lower labor force participation rates than other groups, they outpace other immigrant and native-born women over time. Refugee women’s labor force participation rates are not influenced by their home country participation rates. Refugee women, therefore, seem quick to adapt to host country labor markets. However, their wages remain lower indicating structural inequality rather than lack of assimilation.

“Opt out” or kept out? The effect of stigma, structure, selection, and sector on the labor force participation of married women in India

AbstractUsing the 61st and 68th rounds of National Sample Survey data, we investigate the role of stigma, the economy’s structure, potential selection bias, and sectoral differences in explaining the low labor force participation (LFP) of middle and secondary educated women in India relative to low‐ and high‐educated women (the “U‐shape”). Estimating LFP regressions on a sample of prime‐aged married women, we show that, controlling for background characteristics, if a woman’s husband works in a white‐collar job in a region with a high share of blue‐collar jobs, she is less likely to participate in the labor market (stigma). We also find a positive effect of an increase in an index of white‐collar job growth (structure) on married women’s LFP. These effects are present in both rural and urban sectors but are strongest in the rural sector. However, middle and secondary educated women are still found to have substantially lower LFP than low‐ and graduate‐educated women in both sectors. Indeed, over time, the U‐shape persists in the rural sector and deepens in the urban sector. Because unobservables are quite large in the urban sector, we use the method of instrumental variables and find an increasing return at middle levels but stagnation at higher levels.

Impact of remittances on male and female labor force participation patterns in Africa: Quasi‐experimental evidence from Ghana

AbstractIn this paper, we examine how remittances, an outcome of labor mobility, affect labor market activities in Ghana using detailed household and individual‐level data. This is important, considering the extensive literature that has documented the remittance–poverty reduction nexus. First, we find a strong negative association between household remittance‐receiving status and individual labor supply decisions using instrumental variable estimation techniques. Second, we find the depressing effect of remittances on labor supply decisions to be much stronger in rural areas. Rural women who reside in remittance‐receiving households are less likely to be in the labor force compared with those who do not reside in such households. Remittances have very little impact on labor supply decisions in urban areas. Our findings support that remittances can exacerbate long‐term poverty reduction in rural areas through lower labor force participation, and as such rural‐based and gender‐based interventions may be needed to help redirect remittance income.

Labour Force Participation among MENA Women in the United States: Exploring the Role of Ethnically Homogamous Relationships

AbstractThis study uncovers variations in female labour force participation (FLFP) among women in the US originating from the Middle East and North Africa (MENA), with a focus on differences by nativity status, and investigates the role of ethnically homogamous relationships in explaining these variations. Lower levels of US labour force participation among women from the Middle East and North Africa (MENA) is puzzling, given that these women have higher educational attainments than most women in the US. Recent work has suggested that looking more closely at the influence of homogamy on immigrant women’s economic activity may help to explain this puzzle. Drawing from prior research on FLFP and immigrant integration, we hypothesized that foreign‐born women from MENA will report lower labour force participation rates relative to their US‐born counterparts, and ethnically homogamous marriage will explain differences in FLFP across nativity status. Data come from the Public Use Microdata Samples (PUMS) from 2012–2016 American Community Surveys (ACS). The analytic sample consists of 33,133 women in the United states of MENA origin who are in the prime working ages of 25 to 59. As hypothesized, we found that foreign‐born MENA women reported significantly lower labour force participation rates than their US‐born counterparts. We also found that after controlling for all relevant characteristics, MENA women (both US‐born and foreign‐born) with MENA husbands remained dramatically less likely to be in the labour force than women with non‐MENA husbands. Our findings suggest the disadvantage in FLFP experienced by foreign‐born MENA women is due mostly to high rates of ethnically homogamous relationships among this population relative to their US‐born counterparts. Thus, our study highlights ethnic homogamy as a structural‐cultural barrier for MENA women’s labour force activity in the US and suggests that empirical research on FLFP and immigrant integration should consider partner characteristics as a key determinant of women’s labour force participation.

The Relationship between Female Labor Force Participation and Violent Conflicts in South Asia

This paper explores the link between the prevalence of violent conflicts and extremely low female labor force participation rates (FLFPR) in South Asia. We merge Labor Force Surveys (LFSs) from Bangladesh, Sri-Lanka, India, and Pakistan to the Global Terrorism Database (GTD) to estimate the relationship between terrorist attacks and female labor supply. We exploit the availability of geographical level data on exposure to violence, comparing administrative units exposed to attacks with administrative units not exposed. We find that one additional attack reduces FLFP rates by about 0.008 percentage points, on average. Violence has less impact on male labor participation, thus widening the gender labor participation gap. Also, one extra wounded person or one extra killed person reduces FLFP rates by 0.0015 and 0.0048 percentage points on average, respectively. We test the added-worker effect theory - which posits that violence might increase FLFP as women try to make up for lost household income - and find mixed evidence: greater prevalence of attacks may encourage married women to exert more working hours, but when the environment gets more risky as number of dead and wounded people increase, all women work less hours. We also test the non-linearity of various violence effects, finding that violence decreases FLFP less where FLFP was already higher before the advent of violence, and that violence has a progressively greater impact on lowering FLFP where the number of attacks is higher.

Obstacles to Labour Market Participation Among Arab Women in Israel

This study investigates the factors that underlay the low labour force participation rate among Palestinian-Arab women in Israel relative to Jewish women despite the high educational attainment among this group. We focus on four factors that could explain this pattern: (i) socioeconomic factors such as age and education, (ii) culture factors such as the religiosity of the individual-woman and her family, (iii) family structure and related public policies, and (iv) the early retirement of Arab women from the labour market. We find that all four of these factors affect the probability of Palestinian-Arab women participating in the labour market. We conclude by discussing the implications of our findings for labour market policies.

Burdened by renewable energy? A multi-scalar analysis of distributional justice and wind energy in the United States

The transition towards renewable energy is likely to be uneven across social and spatial dimensions. To ensure this transition is equitable and just, energy injustice has become the key framework for analyzing and interpreting the distribution of energy infrastructure. Wind energy development has experienced a significant gap between broad public support for increased development but persistent localized opposition to proposed projects, indicating that wind represents a locally unwanted land use. We present the theoretical argument that although the negative impacts of wind energy infrastructure are less extreme than those posed by other, more toxic, unwanted land uses, their status as a locally unwanted land use will produce similar distributional injustices as have been found throughout the environmental injustice literature. Using data from both the American Community Survey, the U.S. Wind Turbine Database, and the National Renewable Energy Lab we use logistic and Poisson regressions, fixed effects, and temporal lags to evaluate the current landscape of wind energy injustice along the social dimensions of income, race and ethnicity, age, education, labor force participation, and rurality at three spatial scales: between all counties within the contiguous United States, between counties within states with wind energy, and between census tracts within counties with wind energy. We do not find strong evidence of distributional injustice along the lines of race, ethnicity, or low-income. However, we do find evidence of injustice for populations which are younger, less educated, have lower labor force participation, and are more rural.

Older adults’ integration in the labour market: a global view

AbstractWhat governs labour force participation in later life and why is it so different across countries? Health and labour force participation in older ages are not strongly linked, but we observe a large variation across countries in old-age labour force participation. This points to the important role of country-specific regulations governing pension receipt and old-age labour force participation. In addition to the statutory eligibility age for a pension, such country-specific regulations include: earnings tests that limit the amount of earnings when pension benefits are received; the amount of benefit deductions for early retirement; the availability of part-time pensions before normal retirement; special regulations that permit early retirement for certain population groups; and either subsidies or extra costs for employers if they keep older employees in their labour force. This paper asks two questions: Can we link a relatively low labour force participation at ages 60–64 to country-specific regulations that make early retirement attractive? and Can we link a relatively high labour force participation at ages 65–74 to country-specific regulations that make late retirement attractive? To answer these questions, we compared the experiences in a set of developed countries around the world in order to understand better the impact of country-specific rules and laws on work and retirement behaviour at older ages and, by consequence, on the financial sustainability of pension systems.

Bucking the Trend: Female Labor Market Participation in Kosovo

This paper adds to the limited research conducted on labor markets with low female labor force participation, providing the first multivariate analysis for Kosovo. The determinants of female labor force participation (FLFP) in Kosovo are investigated utilizing an eclectic model, comprising of individual, household, and socio-economic determinants, to analyze data from the Kosovo Labor Force Survey. Both supply and demand factors contribute to the explanation of the low FLFP in Kosovo. The results confirm that: age, marital status, education, labor market demand and the composition of the household are significant determinants of FLFP. These findings indicate the importance of taking a household level approach when analyzing labor force participation in countries with low female force participation.

Teachers as good mothers, mothers as good teachers: Functional and ideological work–family alignment in the South Korean teaching profession

As one of the largest women‐dominated employment niches in many national contexts, the teaching profession has been widely studied, yet the gender, work and family negotiations within this profession deserve fuller attention. The case study of South Korean teachers, one of the most highly qualified teaching workforces in the world, illuminates how particular professions create specific challenges as well as supports for work and family that can counter national patterns of women's low labour force participation. This study engages with theoretical debates regarding ‘work–family conflict' and ‘work–life balance' to develop the alternative framework of ‘work–family alignment' giving greater attention to cultural, ideological and functional dimensions within specific occupations and national contexts. However, rather than expanding opportunities for women, work–family alignment often depends on conformity to normative gender roles — both at work and within families. Nonetheless, the framework of work–family alignment can inform policy implementation by demonstrating that both functional and ideological supports are needed for workplace and state policies to be effective.

Dynamics of female labor force participation and welfare with multiple social reference groups

Abstract I develop a model with status concerns to analyze how different economic factors affect female labor participation and welfare, as well as average household incomes and wages. Reductions in the price of domestic goods and increases in female wages have positive effects on female participation. Increases in male wages have different effects on female participation depending on whether they affect female wages or not. Events that lead to increases in female participation are usually associated with decreases in the welfare of stay-at-home wives but are not necessarily associated with increases in welfare of working wives. Allowing for part-time work can lead to an increase in overall female labor force participation, but some women that would have worked full-time end up working part-time. If female wages are endogenous, an increase in male wages leads to an increase in the female participation rate even if it is not associated with a decrease in the gender wage gap. The positive feedback of increased female participation on their wages can lead to hysteresis of dual equilibria of high and low female labor force participation and a discontinuous transition between these equilibria.

Structure and growth of employment: evidence from India KLEMS data

PurposeThis study aims to analyze the structure and trend in employment in the Indian economy between 1980-8081 and 2015-2016.Design/methodology/approachUse of India KLEMS data set. Estimate growth rate of employment and discuss employment prospects using “Point” employment elasticity.FindingsWhilst India’s GDP growth rate has been quite impressive since the reforms of 1991, the rate of employment growth, especially in the recent period of 2003-2015, has been quite slow (1 per cent) with low employment elasticity (0.1). The pattern of employment growth has also been imbalanced with slow rate of employment growth in manufacturing and rapid growth rate in the construction sector. India now also has low labour force participation rate and a large share of informal employment in the economy.Research limitations/implicationsThe limitation is the lack of reliable data on employment for the recent period.Practical implicationsWith overall low employment elasticity, India would have to explore sectors where more employment opportunities could be created.Social implicationsIndia has to create not only more jobs but also “good” jobs.Originality/valueThe India KLEMS data provide a time series for employment, which has been used in this paper to find “Point” elasticity instead of arc elasticity of employment and is an improvement over existing employment elasticity estimates.

Understanding the Critical Aspects of South Asian Labor Market: Implications and Policy Responses

Objectives: This paper attempts to explore the critical insights into the labor markets of South Asian countries taking ILO’s Key Indicators of the Labor Market (KILM) as an example for illustrations. In addition, the paper puts its lens on addressing adequate policies and program responses at country level, especially for Bangladesh. Methodology: This is basically a policy-focused study focusing on an extensive analysis of existing relevant documents and literature. The paper has therefore adopted three steps methodological approach: collecting, scrutinizing and analyzing. The required data were collected from secondary sources including strategic papers, technical notes, conference proceedings, statistical reports, research articles, relevant books and e-materials of reputed international organizations such as ILO and World Bank. Findings: A critical review of the existing facts and documents has revealed that despite geo-political and ethnical differences, South Asian labor economies are characterized with homogonous labor market characteristics including low labor force participation rate, gender gap in employment and wages, notable labor dependency ratio, working poor, sluggish wage growth, low labor productivity, excessive working hours, high NEET rate, and a state of labor underutilization. In addition, countries differ in terms of policy issues, implementation levels, data availability and compliance to ILO’s decent work agenda to a large extent. Recommendations: An integrated labor policy incorporating the lessons and experiences of developed countries, opinions of stakeholders and labor specialists, balanced and diversified development programs, compliance to ILO’s decent work agenda, and collaborative works with national and international labor organizations are supposed to contribute to better functioning of labor markets. Implications: Although this region of the world is blessed with abundant labor force, a critical analysis has revealed several implications at both national and regional level. The current scenario of lower labor force participation rate and higher time-related underemployment indicate the absence of policies for the fullest utilization of this golden human resource. In addition, slow or negative wage growth and poor wages badly affect the living standards of workers. Despite the consecutive growth in industry and service sector, still the employment in this region is predominantly agricultural which in turn is largely responsible for informal employment. Value/Originality: This study is one of very few labor market studies focusing on the critical aspects of South Asian labor markets. The paper is therefore expected to add value to the existing field of regional labor market research. Academics, researchers, policymakers and stakeholders are largely be benefited from this study.

Health-related educational inequalities in paid employment across 26 European countries in 2005–2014: repeated cross-sectional study

ObjectiveThe study investigates the trends in health-related inequalities in paid employment among men and women in different educational groups in 26 countries in 5 European regions.DesignIndividual-level analysis of repeated cross-sectional...

Economic Consequences of the U.S. Convict Labor System

Prisoners employed in manufacturing constitute 4.2% of total U.S. manufacturing employment in 2005; they produce cheap goods, creating labor demand shock. I study the economic externalities of convict labor on local labor markets and firms. Using newly collected panel data on U.S. prisons and convict-labor camps from 1886 to 1940, I calculate each county's exposure to prisons. I exploit quasi-random variation in county's exposure to capacities of pre-convict-labor prisons as an instrument. I find that competition from cheap prison-made goods led to higher unemployment, lower labor-force participation, and reduced wages (particularly for women) in counties that housed competing manufacturing industries. The introduction of convict labor accounts for 0.5 percentage-point slower annual growth in manufacturing wages during 1880–1900. At the same time, affected industries had to innovate away from the competition and thus had higher patenting rates. I also document that technological changes in affected industries were capital-biased.

Author's Response: Assessing China's Potential Growth

Author's Response:Assessing China's Potential Growth Nicholas R. Lardy (bio) The commentators on The State Strikes Back: The End of Economic Reform in China? for the most part agree with the first of the two key themes of the book: that the increased role of the state in resource allocation in recent years has been an important contributor to China's slowing economic growth. They mostly disagree with the second key theme: that since China's level of GDP per capita is only about one-quarter of the level of advanced industrial economies, it potentially has substantial room for convergence toward higher levels of development that might be captured by a return to the more market-oriented economic policies of the past. In this response, I will focus on addressing some of their concerns around both of these themes. The State Contribution to China's Slowing Growth Loren Brandt focuses in his review on the state's role in the economy. He acknowledges that productivity growth in the state sector has slowed, but he argues that the most important reason for China's slowing economic growth is the declining productivity of private firms. In support of this, he points to research showing how productivity growth in industry slowed after 2005 and eventually turned negative. Industry, he contends, is largely private, so the productivity growth of private firms must have fallen. There are two problems with this approach. First, in 2005, one-third of value added in industry was contributed by state firms.1 The decline in return on assets of state firms by two-thirds after 2007 may explain most of the downturn in industrial productivity that Brandt reports. Second, Brandt's approach ignores China's service sector, which as early as 2005 was as important as industry in terms of its contribution to output and is much more heavily dominated by state firms than industry. But the return on assets of state service companies is lower than for state industrial firms and also fell substantially after 2007. [End Page 174] Brandt questions the use of return on assets, which looks at profits relative to assets, as a proxy for productivity—a measure of value added in constant prices relative to an appropriately weighted basket of assets and labor. For two reasons, however, the sharp decline in the return on assets of state industrial firms relative to private industrial firms is a good proxy for underlying trends in the productivity in firms of the two types of ownership. First, to claim that the productivity of state firms did not fall relative to private firms after 2007, one would have to show that there was some combination of accelerated employment growth relative to assets in private industry and an unusual slowdown in employment growth relative to assets in state industrial firms. Second, Brandt also points out that changes in market power can influence profitability and thus the return on assets, making the latter an unreliable guide to underlying productivity. But the consolidation of large state firms under the State-owned Assets Supervision and Administration Commission, established in 2003, likely gives state companies more influence on pricing relative to the influence of private firms. This suggests that the data in the book showing a sharp decline in the return on assets of state companies understates the pace of deterioration in their underlying economic performance. The Potential for Convergence China faces three potential headwinds that were absent or possibly less significant in the other East Asian economies that converged toward advanced-economy levels of per capita output—demographics, the environment, and corruption. One or more of these is mentioned by each of the reviewers. Kenneth Pomeranz refers to the demographic issue of China's workforce. China's ratio of the working-age population to the non-working-age population began to decline in 2010, a trend that will continue for at least two more decades. Other things being equal, this is certainly adverse for China's potential growth. But other things need not be equal. Most importantly, as I point out in the book, China has a very low labor force participation rate among older age cohorts. This is a function...

How do tax progressivity and household heterogeneity affect Laffer curves?

How much additional tax revenue can the government generate by increasing the level of labor income taxes? In this paper, we argue that the degree of tax progressivity is a quantitatively important determinant of the answer to this question. To make this point, we develop a large scale overlapping generations model with single and married households facing idiosyncratic income risk, extensive and intensive margins of labor supply, as well as endogenous accumulation of human capital through labor market experience. We calibrate the model to U.S. macro, micro, and tax data and characterize the labor income tax Laffer curve for various degrees of tax progressivity. We find that the peak of the U.S. Laffer curve is attained at an average labor income tax rate of 58 % . This peak (the maximal tax revenues the government can raise) increases by 7 % if the current progressive tax code is replaced with a flat labor income tax. Replacing the current U.S. tax system with one that has Denmark' s progressivity would lower the peak by 8 % . We show that modeling the extensive margin of labor supply and endogenous human capital accumulation is crucial for these findings. With joint taxation of married couples (as in the U.S.), higher tax progressivity leads to significantly lower labor force participation of married women and substantially higher labor force participation of single women, an effect that is especially pronounced when future wages of females depend positively on past labor market experience.