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Female labour force participation and economic development

Misbah Tanveer Choudhry (Centre for Research on Economic Empowerment in South Asian Women, Luton, UK)
Paul Elhorst (Faculty of Economics and Business, Rijksuniversiteit Groningen, Groningen, The Netherlands)

International Journal of Manpower

ISSN: 0143-7720

Article publication date: 1 October 2018

2296

Abstract

Purpose

The purpose of this paper is to present a theoretical model, which is aggregated across individuals to analyse the labour force participation rate, and empirical results to provide evidence of a U-shaped relationship between women’s labour force participation and economic development.

Design/methodology/approach

The U-shaped relationship is investigated by employing a panel data approach of 40 countries around the world over the period 1960–2005. It is investigated whether the labour force behaviour of women in different age groups can be lumped together by considering ten different age groups.

Findings

The paper finds evidence in favour of the U-shaped relationship. For every age group and explanatory variable in the model, a particular point is found where the regime of falling participation rates changes into a regime of rising participation rates.

Research limitations/implications

To evaluate this relationship, microeconomic analysis with primary data can also provide significant insights.

Social implications

Every country can narrow the gap between the labour participation rates of men and women in the long term. Fertility decline, shifts of employment to services, part-time work, increased opportunities in education, and the capital-to-labour ratio as a measure for economic development are the key determinants.

Originality/value

In addition to the U-shaped relationship, considerable research has been carried out on demographic transition. This paper brings these two strands of literature together, by econometrically investigating the impact of demographic transition on female labour force participation given its U-shaped relation with economic development, i.e., turning points for different explanatory variables are calculated and their implications for economic growth are discussed.

Keywords

Citation

Choudhry, M.T. and Elhorst, P. (2018), "Female labour force participation and economic development", International Journal of Manpower, Vol. 39 No. 7, pp. 896-912. https://doi.org/10.1108/IJM-03-2017-0045

Publisher

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Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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