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Globalization and Female Labor Force Participation in Developing Countries: An Empirical (Re-)Assessment

Author

Listed:
  • Arusha Cooray

    (University of Wollongong)

  • Isis Gaddis

    (Georg-August-University Göttingen)

  • Konstantin M. Wacker

    (Georg-August-University Göttingen)

Abstract

We 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.

Suggested Citation

  • Arusha Cooray & Isis Gaddis & Konstantin M. Wacker, 2012. "Globalization and Female Labor Force Participation in Developing Countries: An Empirical (Re-)Assessment," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 129, Courant Research Centre PEG.
  • Handle: RePEc:got:gotcrc:129
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    File URL: http://www2.vwl.wiso.uni-goettingen.de/courant-papers/CRC-PEG_DP_129.pdf
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    Citations

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    Cited by:

    1. Janneke Pieters, 2015. "Trade liberalization and gender inequality," IZA World of Labor, Institute for the Study of Labor (IZA), pages 114-114, January.
    2. Isis Gaddis & Stephan Klasen, 2014. "Economic development, structural change, and women’s labor force participation:," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(3), pages 639-681, July.
    3. Hadi Esfahani & Roksana Bahramitash & Bin Lin, 2016. "Gender and Labour Allocation: the Role of Institutions and Policies in the Allocation of Female and Male Labor," Working Papers 998, Economic Research Forum, revised May 2016.
    4. repec:uwp:jhriss:v:52:y:2017:i:2:p:457-490 is not listed on IDEAS
    5. Isis Gaddis & Janneke Pieters, 2017. "The Gendered Labor Market Impacts of Trade Liberalization: Evidence from Brazil," Journal of Human Resources, University of Wisconsin Press, vol. 52(2), pages 457-490.
    6. Gunatilaka, Ramani., 2013. "To work or not to work? : Factors holding women back from market work in Sri Lanka," ILO Working Papers 994838403402676, International Labour Organization.
    7. repec:ilo:ilowps:483840 is not listed on IDEAS
    8. Ghani,Syed Ejaz & Grover,Arti & Kerr,Sari & Kerr,William Robert, 2016. "Will market competition trump gender discrimination in India ?," Policy Research Working Paper Series 7814, The World Bank.

    More about this item

    Keywords

    Globalization; Labor Force Participation; FDI; Trade; Development; Hierarchical Panel Data Models;

    JEL classification:

    • F0 - International Economics - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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