Investigating the Macroeconomic Factors that determine a Female Worker to participate in the Labor Force: Evidence from the South Asian Countries

A.H.M. Shahid Shami, Tania Islam, Istihak Rayhan


Over the last four decades female labor force participation rate increases significantly in the South Asian countries, while it remains stagnant or sometime declines into the developed countries. The study is for investigating the macroeconomic determinants that play the vital role in decision making whether a female will participate in the labor force or not. Data are taken from five south Asian countries named Bangladesh, India, Sri-Lanka, Nepal, and Pakistan over the period of 1990-2015. Breusch-Pagan, Honda, King-Wu, Standardized Honda and Standardized King-Wu Lagrange Multiplier test confirm there exists cross-section effects. Hausman test confirms that fixed effect model is appropriate for empirical analysis for this study. But Breusch-Pagan LM test, Pesaran scaled LM test and Baltagi, Feng, and Kao bias-corrected scaled LM test confirm that there exist cross-sectional dependence in residuals. Therefore, Panel Corrected Standard Error (PCSE) model has been employed to get the unbiased estimators. Empirical results of PCSE model confirm that per capita GNI, Square of per capita GNI, Education, and Fertility rate have statistically significant impact on fertility rate in the south Asian countries. Empirical results also reveal the validity of inverted U shaped hypothesis of female labor force participation decision.

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Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.