Disentangling the drivers of labour force participation by sex - a cross country study

Stephanie Kelly, Abigail Watt, Jeremy Lawson and Nancy Hardie

No 15661, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The relative trends in labour force participation rates of men and women have diverged across the OECD countries over recent decades. Female participation rates have, on average been on a rising trajectory while male participation rates have tended to fall, albeit with significant crosscountry heterogeneity. Nevertheless, in most countries, female participation remains well below that of men. This paper uses panel modelling to assess the cross country drivers of male and female participation rates between 2002-2016 across 31 OECD economies. Our findings suggest that increasing the provision and take up of paternity leave can be an important policy instrument for lifting female participation, without weakening male labour force attachment. Higher female participation rates are also associated with lower levels of employment protection legislation for those on temporary contracts and lower tax wedges on second earners and single parents. These results have potentially important implications for policymakers seeking to increase female labour force participation for both equity and efficiency reasons, particularly in the wake of the COVID crisis, which has had a larger negative effect on female labour market outcomes.

Date: 2021-01
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