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Can economic development boost the active female labor force?

Chi-Wei Su (), Zheng-Zheng Li (), Ran Tao () and Oana-Ramona Lobonţ ()
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Chi-Wei Su: Qingdao University
Zheng-Zheng Li: Ocean University of China
Ran Tao: Shandong Entry-Exit Inspection and Quarantine Bureau
Oana-Ramona Lobonţ: West University of Timisoara

Quality & Quantity: International Journal of Methodology, 2019, vol. 53, issue 2, 1021-1036

Abstract: Abstract This study explores whether the female labor force participation rate (FLFPR) can promote economic development in Asian countries. We apply the method of bootstrap panel Granger causality in order to consider the cross-sectional dependency and heterogeneity to detect specific patterns of the interactive relationships between the two variables. The estimation results point out that the interaction patterns vary across countries, which is consistent with the U-shaped hypothesis. Specifically, when the economy develops, FLFPR declines in Vietnam and India, whereas economic development promotes the FLFPR in Korea, Malaysia, Singapore and Thailand. More specifically, when GDP per capita lies at a relatively low level, the income effect dominates the substitution effect, resulting into the FLFPR changing in opposite direction. Nevertheless, the substitution effect holds the dominant position when the GDP per capita reaches a high level. The increase of FLFPR is accompanied by economic development due to availability of more jobs and increasing level of education. Therefore, policy makers should formulate plans in order to benefit from the potential of the female labor force by stimulating economic development.

Keywords: Female labor force participation rate; Economic development; Bootstrap panel Granger causality; U-shaped curve; C1; E2; J1 (search for similar items in EconPapers)
Date: 2019
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