Can climate finance bridge the gender gap in labor markets? evidence from developing countries

Women’s vulnerability to climate change and transition towards sustainable development has led to a growing focus on how climate policies affect women's coping strategies, especially their performance in the job market. This study uses a panel data set of 92 developing countries to explore how climate finance affects labor market in recipient countries. The results show that women’s participation in labor market declines with climate finance, in which mitigation finance and financial flows for infrastructure development and multisector have more notable effects. In countries with higher risks and economic uncertainty, the adverse effects of climate finance are more notable. In addition, African countries perform worst in this regard. Further analysis shows that gender norms, such as limited access to public resources, unequal distribution of family work, and the crowding-out effect of men, still make it hard for women to join the workforce in the context of climate finance. This study highlights the need for climate finance to be more inclusive and avoid upholding barriers to women’s employment caused by gender norms, thus achieving sustainable development.