IMPACT OF FEMALE LABOR FORCE PARTICIPATION IN ECONOMIC DEVELOPMENT OF PAKISTAN

Abstract

Purpose

This paper tries to examine whether the labor force participation of the female population affects the growth of the economy.

Methodology

The sampling data was collected from the World Bank’s website from 1971 to 2018. The Johansen co-integration test and VECM model were used to examine the relationship between female labor force participation and economic development.

Findings

The result of the Johansen and Juselius Co-integration test showed the long-term relationship between Female Labor Force Participation and Economic Development. The finding also indicated that female labor force participation had a negative impact on GDP. The CUSUM stability test was used for the short-run stability adjustments. Results of the CUSUM stability test showed that the coefficients of ECM (-1) speed of adjustment were stable at a 5 percent significance level, there were no oscillations outside the critical level, and the CUSUM curve was above the origin line, which indicated the significance of our short-run dynamics.

Conclusion

The study concludes that female labor force participation has a significant negative impact on Pakistan’s GDP, this is due to societal and cultural norms as well as the religious dignity of women.