Gendered laws and labour force participation

ABSTRACT

The laws that discriminate against women represent one of the most prevalent forms of gender inequality, hindering women’s empowerment and economic outcomes. In this regard, this paper sheds light on the relationship between legal constraints on women and various labour force outcomes. Based on a global sample of countries over 1970–2019, the results show that legal gender equality helps countries bridge the gender gap in labour force participation. More-gender equal laws (i) translate into a larger share of women in the workforce, and (ii) do not have a negative effect on that of men. As a result, legal gender equality also boosts labour force participation on aggregate. These patterns are long-lasting for upwards of 10 years. The findings point to a win-win situation: As countries repeal the laws that discriminate against women, which could be achievable in the shorter term, they can attain more inclusive and higher economic growth. This is even more important in the post-Covid-19 period, considering the adverse effects of the pandemic on gender inequality and economic growth.

KEYWORDS:

• Gender inequality
• gender gaps
• gendered laws
• women’s empowerment
• labour force participation
• inclusive growth

JEL CLASSIFICATION:

• J16
• J71
• K31
• K38
• O10
• O40

Acknowledgments

The views expressed in this paper are those of the author and do not necessarily represent the views of the IMF, its Executive Board, or IMF management. I thank the editor and the anonymous referee for useful comments. All errors are my own.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ There is a long literature on the positive effects of gender equality on economic growth and development, e.g. see Klasen and Lamanna (2009), Duflo (2012), Cuberes and Teignier (2016), Bertay, Dordevic, and Sever (2020).

² It is, though, worth to note that the process and complexity of legal reforms towards gender equality depend on the country-specific context. See Christopherson et al. (2022) for a detailed discussion.

³ In this context, the positive role of legal gender equality in labour force outcomes (as shown by this paper) can be viewed as a lower bound.

⁴ The extension by Teulings and Zubanov (2014) to the original methodology (Jordà 2005) is adopted to address a possible bias. That is, by including the forward values of the WBL index, the specification can disentangle the effects of its current level on the forward values of labour force participation, without any bias arising from the WBL index in the following years.

⁵ The results are also illustrated in the Appendix.

⁶ The results are robust to (i) controlling for other variables, e.g. per capita GDP, growth rate of GDP, or a proxy for institutional quality; and (ii) weighting with population (to decrease the influence of less populous countries).

⁷ However, higher labour force participation of women does not necessarily imply the lack of gender-based segregation in the labour market, which may still restrict women’s access to high-quality jobs, prevent equal earnings for equal work, and negatively affect women’s work conditions.