Global development and female labour force participation: evidence from a multidimensional perspective

Abstract

The relationship between female labour force participation (FLFP) and economic development is far more complex than it is often described in academic literature. Most studies have relied on income as the only proxy for development. In this paper, we re-examine this relationship from a multidimensional perspective. A principal component analysis method was used in order to cluster the information contained in multiple development indicators. The analysed data include the following dimensions: access to basic services, environment, inequality, poverty, education, economic structure, health, income and FLFP. The results provide evidence about the existence of a U-shaped relationship between development and FLFP. Least and most developed countries have the highest levels of FLFP and, conversely, countries with intermediate levels of development have the lowest. We observed that MENA and South Asian countries present a lower FLFP in relation to what is expected for their level of development. Our estimates suggest that FLFP is also affected by social, cultural and legal norms. Thus, greater freedom to travel or work as well as the existence of laws that criminalize workplace harassment promote FLFP. This suggests that differences in FLFP are explained by economics and non-economic factors and policy makers should explicitly consider this multidimensionality.