Female Labor Force Contribution to Economic Growth

Abstract

This research has examined the hypothesis that level of women participation in workforce, as measured by female labor force participation rate, has a positive effect on economic growth. Using both the classical Solow’s growth model and a version of Mankiw, Romer, Weil augmented Solow’s model, we incorporate female and male labor forces into the model as separate explanatory variables for growth. This augmented Solow’s model was then used to estimate the influence of female labor force on the steady-state level of income. The OLS estimation of this equation uses cross-sectional data on 122 countries around the world. Then both models were estimated using panel data from year 1998 to 2016 for 5 groups of countries categorized by World Bank according to their income level. Since the variables do not have the same order of integration, ARDL approach was used. The behavioral variables have the expected positive signs, implying that all factors have positive contributions to growth. The coefficients of female labor force have positive signs and are significant in almost every case, confirming the hypothesis of positive contribution of female labor force on growth.