Do We Have Enough Women in the Labour Force?

Women make up half the world’s population, yet when it comes to their participation is much less in labour markets compared to their male counterparts. This is measured by their labour force participation rates (LFPR), defined as the percentage of the labour force and the working-age population. This article completely focuses on women as their participation in the labour force and factors affecting.

Across the world, the aggregate LFPR conceals more than it reveals. For example, during 1960-1980, female LBFR remained almost constant. But, Psacharopoulos et al. (1989) found that the number of working women rose in richer countries whereas it fell almost equally in developing countries. The statistics also depicts a radical increase in female LFPR. As many economists believe that female participation in the labour force to follow a U-shaped pattern. Initially driven by economic necessity, as income increases, they drop out of the labour force (income effect) since women are not seen as the primary income earners.

However, there is much more variation in LFPR trends for women than for men. Yet, another article by the White House explains the U-shaped curve by elaborating on the idea of these women engage other activities as GDP increases. For example, some women will choose to engage in home production activities rather than pursuing formal work while others are attending school, to develop additional human capital that will increase their productivity. Furthermore, economic development among low-GDP countries often results from a structural shift as the women start moving from the primary sector to the secondary sector. Hence, the inverse relationship between GDP and female labour force participation rates at the lower end of the distribution is not an indication that lower female labour force participation rates increase GDP, but instead is indicative of women changing their work decisions as GDP rises. There is another study which shows that higher female LFPR can be observed with fewer working hours.

This participation rate depends on various factors like fertility, mobility, child-care facilities, social norms etc. A meta-analysis by Matysial et al. (2007) depicts that women’s employment is directly based on the number of children at home and employment has a negative impact on childbearing decisions. The authors have also explained that women’s decision for employment and child bearings depend upon external factors. Lastly, they have explored the stability at a job as another variable which directly affects the women’s employment as more stability increases the LFPR.


Mobility is yet another issue which affects the participation rate as women don’t find themselves as “safe” while travelling from local transport. A survey was conducted by the Center for Economic Research in Pakistan (CERP), 70% of male respondents said they would discourage female family members from taking public transit. Sajjad et al. (2017) have also expressed the social norms persisting in the state directly affected the mobility, hence the female LBPR as “These are families who would accept their female family members travelling only if they have access to a safe women’s only space.” In spite of the presence of separate women’s compartments in the local transports, there were still many women who lacked access to such benefits due to limited geographical coverage, restricted timings and lack of publicity which discouraged them from travelling.

Apart from fertility, mobility, unpaid child care facilities also affects labour force participation. Connelly (1992) has proved using the utility maximising framework that women's decision to participate in the labour force is directly affected by the cost of the child care facilities and the presence of younger siblings at home as the availability of no-cost care showed positive participation. However, if the government directly interferes in lowering the cost of child-care, then we can expect a positive impact on labour force participation. In fact, lower LFPR was found among the mothers of preschoolers due to higher cost of child-care facilities.


In spite of living in the 21st Century, there are few areas where women are restricted to join the labour force and gender-pay persists. However, during the pandemic, some studies suggest a decrease in the gender gap in employment. It’s highly unfortunate that in this competitive world, women are still lagging behind.


References

Psacharopoulos, G., Tzannatos, Z. (1989). FEMALE LABOR FORCE PARTICIPATION: AN INTERNATIONAL PERSPECTIVE. The World Bank Research Observer, 4(2), 187-201. doi:10.1093/wbro/4.2.187

Moore, C.T., Pandey, R., Prillaman S.A. (2018). VOCATIONAL TRAINING PROGRAMS IN INDIA ARE LEAVING WOMEN BEHIND BUT THIS NEEDN’T BE THE CASE. International Growth Centre.


Sajjad, F., Vyborny, K., Anjum, G.A., Field, E. (2017), OVERCOMING BARRIERS TO WOMEN’S MOBILITY IN PAKISTAN, International Growth Centre


White House. (2019). RELATIONSHIP BETWEEN LABOR FORCE PARTICIPATION RATES AND GDP. Retrieved September 24, 2020,https://www.whitehouse.gov/articles/relationship-female-labor-force-participation-rates-gdp/


Matysiak, A., Vignoli, F., (2007) FERTILITY AND WOMEN’S EMPLOYMENT: A META ANALYSIS, Eur J Population (2008) 24:363–384. doi: 10.1007/s10680-007-9146-2


Connelly, R. (1992). THE EFFECT OF CHILD CARE COSTS ON MARRIED WOMEN'S LABOUR FORCE PARTICIPATION. The Review of Economics and Statistics, 74(1), 83-90, The MIT Press


by Stuti Gupta (sstutigg@gmail.com)

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