The Causal Relationship between Female Employment and Fertility in South Asia : An Application of the Bounds Testing Approach to Co-Integration

This study applies Granger causality tests within an error-correction framework to analyse the relationship between female employment and fertility in six South Asian countries. Of the six countries, we only find evidence of a co-integrating relationship between fertility and female employment for the Maldives, where in the long run, female employment Granger causes fertility. This differs from previous results for developed countries. Our findings for the short run are broadly consistent with the findings in previous studies with either uni-directional causality running from female employment to fertility (three countries) or bi-directional causality between the variables (two countries). The one exception is Sri Lanka, where there is neutrality