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The Dynamics of Women’s Labour Supply in Developing Countries

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  • Sonia Bhalotra
  • Marcela Umaña-Aponte

    ()

Abstract

This paper investigates cyclicality in women’s labour supply motivated by the hypothesis that it contributes to smoothing household consumption in environments characterised by income volatility. We use comparable individual data on about 1.1 million women in 63 developing and transition countries merged with country-level panel data on GDP during 1986-2006. The scope of these data is unprecedented in the small but growing literature on labour markets in developing countries. We find that the within-country relationship of women’s employment and income is, on average, negative in Asia and Latin America but positive in Africa. We suggest that amongst reasons why African women behave differently are that the conventional family structure with income pooling is less the norm, there are fewer opportunities for paid employment, and aggregate income shocks are more closely tied to rainfall variation. The findings are robust to controls for country-specific trends and potentially correlated shocks. In Asia and Latin America, characteristics that strengthen counter-cyclical responses include low education, being married, being married to men with low education, low wealth, no landownings, rural residence and fertility. These findings suggest that insurance motives underpin the dynamics of women’s work participation. Examination of cyclicality in the distribution of employment across types suggests that recessions in every region are associated with a rise in self-employment amongst women. In Asia and Latin America, there is a parallel rise in paid employment and a sharp drop in non-employment. In Africa, there is a decline in paid employment which overwhelms the rise in self-employment and this is how total employment comes to decline. The results have potentially important implications for understanding labour markets, fertility timing and child outcomes.

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Bibliographic Info

Paper provided by Department of Economics, University of Bristol, UK in its series The Centre for Market and Public Organisation with number 10/235.

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Length: 58 pages
Date of creation: Mar 2010
Date of revision:
Handle: RePEc:bri:cmpowp:10/235

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Keywords: insurance; women’s labour supply; added worker effect; business cycles; dynamics; Africa; Asia; Latin America.;

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References

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Cited by:
  1. Menon, Nidhiya & van der Meulen Rodgers, Yana, 2011. "War and Women's Work: Evidence from the Conflict in Nepal," IZA Discussion Papers 6209, Institute for the Study of Labor (IZA).
  2. F. Francavilla & Gianna Claudia Giannelli & Leonardo Grilli, 2010. "Mothers’ Employment and their Children’s Schooling: a Joint Multilevel Analysis for India," Working Papers - Economics wp2010_07.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
  3. Klasen, Stephan & Pieters, Janneke, 2012. "Push or Pull? Drivers of Female Labor Force Participation during India's Economic Boom," IZA Discussion Papers 6395, Institute for the Study of Labor (IZA).
  4. Pieters, Janneke & Klasen, Stephan, 2011. "Drivers of female labour force participation in urban India during India's Economic Boom," Proceedings of the German Development Economics Conference, Berlin 2011 65, Verein für Socialpolitik, Research Committee Development Economics.
  5. Priebe, Jan, 2011. "Child Costs and the Causal Effect of Fertility on Female Labor Supply: An investigation for Indonesia 1993-2008," Proceedings of the German Development Economics Conference, Berlin 2011 67, Verein für Socialpolitik, Research Committee Development Economics.

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