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Economic growth and female labor force participation in India: Evidence from ARDL and Toda–Yamamoto Tests

Author

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  • Nilu Farhat

    (MDDM College B.R.A Bihar University Muzaffarpur, India)

Abstract

This study examines the long-run relationship between economic growth and female labor force participation (FLFPR) in India over the period 1960–2025. To address historical data gaps and major structural breaks, the analysis utilizes an interpolated FLFPR series alongside structural dummies. Adapting to the mixed orders of integration present in the dataset, we apply an Autoregressive Distributed Lag (ARDL) bounds testing approach for cointegration, followed by the Toda-Yamamoto (1995) Granger causality framework. Furthermore, the Lind and Mehlum (2010) three-step procedure is applied for a rigorous robustness check of non-linearity. The results confirm that the variables are cointegrated, indicating a stable long-run equilibrium. Crucially, the ARDL framework and SLM test mathematically validate Goldin's (1994) classical feminization U-shape in the long run. However, instead of a realized rebound, the empirical evidence shows India's female labor market is currently navigating the structural "trough" (the bottom) of the U-curve. However, the Toda-Yamamoto analysis reveals no statistically significant bidirectional causality between GDP and FLFPR. Ultimately, these findings suggest that while a long-run U-shaped trajectory exists, India's female labor market dynamics are shaped more heavily by underlying structural composition, educational transitions, and regime shifts rather than being strictly driven by aggregate macroeconomic growth alone.

Suggested Citation

  • Nilu Farhat, 2026. "Economic growth and female labor force participation in India: Evidence from ARDL and Toda–Yamamoto Tests," Economics Bulletin, AccessEcon, vol. 46(2), pages 528-539.
    • Handle: RePEc:ebl:ecbull:eb-26-00553
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    JEL classification:

    • J4 - Labor and Demographic Economics - - Particular Labor Markets
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General

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