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RESEARCH PRODUCT

Trade Liberalization, Female Labor Force Participation and Economic Growth

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This research argues that the interaction between international trade and female labor force participation has played a significant role in the process of development. The main concern of our study is to show how differences in per household capital stocks, via international specialization, affect household choice of female labor force participation and fertility, and how these decisions, in turn, feed back and affect the accumulation of capital. Interestingly, and in contrast to conventional wisdom, our theory suggests that specialization in female's comparative advantage sectors expands these sectors but hinders female labor force participation, while specialization in male's comparative advantage sectors generates the mirror image. The reason is that men are assumed to have an advantage in the labor market and therefore are always formally employed. As a result, specialization of the economy in the female's comparative advantage sector drives men into this sector and female out of formal employment.