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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. Tolulope Osinubi & Simplice Asongu, 2020. "Globalization and female economic participation in MINT and BRICS countries," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 48(6), pages 1177-1193, October.
    2. 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.
    3. Janneke Pieters, 2018. "Trade liberalization and gender inequality," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-11, October.
    4. Barbara Dluhosch, 2021. "The Gender Gap in Globalization and Well-Being," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 16(1), pages 351-378, February.

    More about this item

    Keywords

    Globalization; Labor Force Participation; FDI; Trade; Development; Hierarchical Panel Data Models;
    All these keywords.

    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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