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RESEARCH PRODUCT

Globalization and Female Labor Force Participation in Developing Countries: An Empirical (Re-)Assessment

Isis GaddisKonstantin M. WackerArusha Cooray

subject

Labour economics05 social sciences1. No povertyDeveloping countrySample (statistics)Foreign direct investmentGlobalizationMultinational corporation8. Economic growth0502 economics and businessValue (economics)EconomicsMainstream050207 economics10. No inequality050205 econometrics

description

We investigate the impact of foreign direct investment (FDI) and trade, as two measures of globalization, on female labor force participation rate in a sample of 80 developing countries over the time period 1980–2005. Contrary to the mainstream view in the literature, which is mainly based on country-case studies or simple cross-country variation, we find that both, FDI and trade have a generally negative impact on female labor force participation. While the impact is of negligible economic size, it is stronger for younger cohorts, possibly reflecting a higher return to education in open economies. We further find a large degree of cross-regional heterogeneity and that the effect of globalization on female labor force participation depends on the industrial structure, with more positive effects in economies with a higher share of industry in value added. We can thereby explain why country studies find other effects and question the generalization of their results into an overarching globalization tale concerning female labor force participation.

https://doi.org/10.1007/978-3-662-49502-5_22