The impact of macroeconomic growth on female labour force participation: does panel data confirm the “feminisation U” hypothesis?

Angela Luci, Institut National d'Études Démographiques (INED)

This paper investigates the impact of growth on female labour force participation. Recent empirical studies suggest that growth first lowers female employment and then increases it in the long run (“feminisation U”), but these studies are based solely on cross country data and do not offer precise results. In this paper, I test the hypothesis of a “feminisation U” based on cross sectional time series data, which allows to control for possible endogeneity and therefore lowers the risk of obtaining biased estimation results. I use edited data and several econometric methods for dynamic panel data (IV-and System GMM estimations). The analysis confirms the hypothesis of a “feminisation U”. This implies that trusting the equalizing effects of growth leads to high economic costs for women, but also for society as a whole, as it is scientifically recognized that gender-specific employment differences lower a country's growth performance and therefore reduce everyone's welfare.