Female Labour Force Participation

Abstract

Women’s labour force participation is lower than men’s throughout the world. Policymakers are often interested in increasing women’s labour supply, given its positive impacts on women’s empowerment, children’s human capital, and overall economic growth. We identify several policies that consistently increase women’s labour supply: increasing childcare availability, empowering women within households, psychological interventions, prompting businesses to offer amenities like flexibility that female employees value, and increased global exposure among export industries that disproportionately hire women. Other policies we discuss, such as skills training or depression treatment, yield more mixed results and are probably insufficient by themselves to increase women’s labour supply in environments where they face other large barriers, such as social norms or childcare and other household obligations. We also identify several important barriers to women’s labour supply – namely, discrimination and a lack of safety and harassment in public spaces. Developing effective policies to address these constraints remains an important and unresolved question.

Policy Summary: Evidence on increasing women's labour force participation

Throughout the world, women’s labour force participation is lower than men’s, though the gap between men’s and women’s labour force participation varies strikingly across regions. Increasing women’s labour supply is a common goal for policymakers, given its positive impacts on women’s empowerment, children’s human capital, and overall economic growth. We survey the literature on the determinants of women’s labour force participation and labour market outcomes, on both the supply and demand sides of the market and in a variety of contexts. We highlight the following conclusions:

• There is robust evidence that improving childcare availability increases women’s labour supply. Recent research suggests that a promising way to do this is through community-provided childcare centres. Evidence from Burkina Faso and the DRC is particularly striking in demonstrating that mothers are interested in utilising childcare centres even when newly opened (compared to expansions of existing programmes).
• Interventions that empower women within the household (by increasing their access to or ability to control resources) can increase their labour supply outside the household.
• It is possible to increase men’s support for women’s work by changing their attitude toward or beliefs about women’s work, either by educating men about the social acceptability of the work environment or correcting misperceptions about other men’s beliefs about the social acceptability of work. However, attitude changes may not be sufficient to increase women’s labour supply in the longer term, in the presence of other constraints to women’s labour supply such as household chores. Intervening with teenage boys is a potential avenue to change attitudes in a way that will lead to behavioural changes that support women’s work.
• Psychological interventions to raise aspirations, improve generalised self-efficacy and prompt respondents to visualise the future can increase women’s labour supply. The evidence on depression treatment is more mixed, and likely is not sufficient to overcome other barriers to women’s labour supply in environments where it is low.
• A lack of safety and harassment in public spaces decrease women’s investment in human capital and their labour supply. There is evidence that training directed at students and/or teachers reduces the harassment faced by female students in primary, secondary, and tertiary education. Evidence on reducing harassment in public transportation is limited, though increased policing might be a promising approach. Even less is known about how to stop violence against women in the workplace, though policies to increase female managers may help.
• Relatively few workplaces offer amenities which female employees value, such as childcare or flexibility, which limits women’s mobility and contributes to gender pay gaps. Government provision of such amenities can have spillover consequences to women in the private sector; unions or international buyers can also have a role in pushing for these amenities.
• Discrimination is a barrier to women’s hiring and, particularly, to promotion. Inaccurate beliefs, preferences of customers/subordinates and paternalism are contributing factors. Evidence on overcoming these barriers is scant, but affirmative action has the potential to be helpful.
• Evidence from high-income countries suggests that women managers reduce gender pay gaps and are more likely to fire perpetrators of violence at work. However, evidence on the impacts of having women in supervisory, managerial and leadership positions within firms is very limited in low-income countries.
• Increased education or vocational/entrepreneurship training has mixed effects on women’s labour supply and earnings, and there is no evidence that training on average improves women’s outcomes more than men’s. The fact that treatment effects are larger on average when women’s labour supply is higher suggests that human capital is not sufficient to increase labour supply in the presence of other barriers.
• Globalisation increases women’s labour supply in areas where the industries helped by tariff reductions are differentially female-heavy, but decreases women’s labour supply if the affected industries are more male-heavy or if women-heavy industries are hurt by increased import competition.

Female Labour Force Participation: Presentation of key takeaways

For our launch event, Rachel Heath joined us to present the key takeaways from this VoxDevLit, highlighting policy relevant results from recent economic research on female labour force participation.