Globalization and Female Labor Force Participation in Developing Countries: An Empirical (Re-)Assessment
AbstractWe investigate the impact of foreign direct investment (FDI) and trade, as two measures of globalization, on female labor force participation in a sample of 80 developing countries over the last decades. Contrary to the mainstream view in the literature, which is mainly based on country-case studies or simple cross-country variation, we find that both, FDI and trade have a generally negative impact on female labor force participation. While the impact is of negligible economic size, it is stronger for younger cohorts, potentially reflecting a higher incentive to stay out of the labor force and invest in education in view of an increased skill premium due to globalization. We also find that the direction of the effect depends on the industrial structure of the economy. This suggests that there is no evidence of a (conditional) anti-female bias in multinational corporations' factor demand once one controls for the interaction of FDI with the size of the agricultural sector. We can thereby explain why country studies find other effects and question the generalization of their results into an overarching globalization tale concerning female labor force participation.
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Bibliographic InfoPaper provided by Courant Research Centre PEG in its series Courant Research Centre: Poverty, Equity and Growth - Discussion Papers with number 129.
Date of creation: 30 Oct 2012
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Globalization; Labor Force Participation; FDI; Trade; Development; Hierarchical Panel Data Models;
Find related papers by JEL classification:
- F0 - International Economics - - General
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-11-11 (All new papers)
- NEP-INT-2012-11-11 (International Trade)
- NEP-LMA-2012-11-11 (Labor Markets - Supply, Demand, & Wages)
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- Gunatilaka, Ramani, 2013. "To work or not to work? : Factors holding women back from market work in Sri Lanka," ILO Working Papers, International Labour Organization 483840, International Labour Organization.
- Isis Gaddis & Stephan Klasen, 2014. "Economic development, structural change, and women’s labor force participation:," Journal of Population Economics, Springer, Springer, vol. 27(3), pages 639-681, July.
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