Tracing out the U-shape relationship between female labor force participation rate and economic development for Pakistan

Purpose – Several studies have provided empirical evidence that female labor force participation rate exhibits a U-shape during the process of economic development. The purpose of this paper is to explore the existence of U-shape relationship in the case of Pakistan and if it does exist, what factors determine this U-shape relationship? Design/methodology/approach – For the estimation purpose data according to provinces and regions are pooled for three years. The model is estimated using a simple fixed effect test. Findings – The results affirm the existence of U-shaped relationship. Estimation of the pooled data attributed this U-shape relationship with female education attainment, sectoral employment share, unemployment rate, wages and marital status. Results confirm that high rate of economic development is encouraging the female participation in the labor force by increasing the work opportunities for females. The females are taking full advantage of these increased opportunities by increasing their level of education attainment. Research limitations/implications – In testing the U-shape hypothesis, household expenditure on fuel consumption representing level of economic development in the country is used as the data on GDP are not available at the provincial level. Practical implications – This paper recommends that skill-based education programmes should be promoted so that females could be absorbed in the formal labor market. It also recommends measures to decrease unemployment rates and improve labor market conditions. Originality/value – The paper is first of its kind as it applied pooled data technique for the estimation of U-shape relationship.