Factors Affecting Female Labor Force Participation in the Middle East: An Empirical Evidence from Panel Data Approach

Middle East countries have experienced a decline in female labor force participation over the last three decades. Indeed, male labor force participation rates remain higher than that of female labor force, making the gender gap in labor force participation is high. This study empirically investigates the possible determinants of female labor force participation in the Middle East countries. The determinants examined in this study included, fertility rate, female primary education, female secondary education, female tertiary education, urban population, female unemployment, and GDP per capita. For this purpose, the study utilizes the three alternative models of static panel data comprising of the pooled ordinary least squares, random effects, and fixed effects. After obtaining a convenient model, the analysis proceeds with the diagnostic tests to check for multicollinearity, heteroskedasticity, and serial correlation, which, together, make the method reliable. The study comprises the annual panel data for ten Middle East countries covering the period from 1996 to 2018. The data were taken from the World Bank online database, World Development Indicators. The empirical results of this study indicate that female tertiary education has positive and significant impact on female labor force participation rate, while fertility rate, female secondary education, and urbanization rate have negative and significant impact on female labor force participation rate. These results reflect the need for the government to provide tertiary education facilities to female students, and encourage them to pursue their tertiary education in order to increase participation of female in labor force. This is particularly significant as the importance of tertiary education is undeniable in terms of generating highly skilled workers and the declining fertility rate. Moreover, policies in the region should remove barriers to women’s labor force participation and at the same time, encourage women’s active engagement in the labor market for the achievement of economic benefits.