Preferences and the Puzzle of Female Labor Force Participation

Mahdi Majbouri ()
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Mahdi Majbouri: Babson College

No 1675, Working Papers from Economic Research Forum

Abstract: Women in the Middle East have had significant achievements in the last four decades. Their educational attainment had continuously increased while their fertility rate declined. Nevertheless, their labor force participation has remained stubbornly low. This phenomenon is known as the puzzle of female labor force participation (FLFP) in the Middle East. In this study, I provide evidence on one of the most important but least studied hypotheses to explain this puzzle: the role of preferences in the household. Using discrete choice experiments, I solicit preferences of women and men toward three aspects of jobs: 1) full-time vs. part-time, 2) government sector vs. private sector, and 3) being in an all-female vs. mixed-gender work environment. I document that men, who have veto power over women’s decision to work, are willing to pay a 63% wage penalty if a job is in an all-female environment vs. a mixed-gender environment. They are willing to pay a 30% wage penalty if a job is full-time vs. part-time. But they are indifferent between a government sector or private sector job. Men also correctly predict what other men’s preferences are toward these job attributes. Women strongly prefer full-time jobs and are willing to pay a 38% wage penalty for them. Unlike men, they slightly prefer mixed-gender environments over all-female environments but are willing to pay a 5% wage penalty for government sector jobs. They also underestimate how much their husbands prefer all-female work environments over mixed-gender ones and overestimate how much their husbands like government sector jobs. The results show that because men have veto power over women’s decision to work and they strongly prefer all-female work environments, women will have very limited jobs to choose from, such as teaching in primary and middle schools. Hence, they will not participate in the labor market as much as women in other regions of the world.

Pages: 28
Date: 2023-11-20, Revised 2023-11-20
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