The relationship between economic development and female labour force participation: micro-level evidence from Mexico
Isaac López-Moreno Flores
Abstract
This descriptive paper is the first to present a snapshot of the current within-country relationship between female labour participation rates (FLPRs) and different stages of economic development. Its goal is to evaluate a hypothesis which indicates that, in middle-income countries like Mexico, FLPRs are low because of the high percentage of jobs in the industrial sector, in combination with social stigma towards women working in blue-collar jobs. The regression analysis relies on micro-data obtained from Mexico’s National Household Surveys on Employment and Occupations (ENOE), and uses repeated cross-sectional data from the first quarters of 2005, 2010, 2015 and 2019. After developing an innovative empirical strategy, I used a probit model to estimate women’s likelihood of being economically active based on the sectoral distribution of employment in the municipality where they live. The results show that a higher percentage of industrial jobs at the municipal level is positively associated with higher female labour participation after controlling for individual, household, and municipal characteristics. Furthermore, a higher percentage of jobs in the service sector has an even stronger positive relationship. Conversely, women’s probability of being economically active decreases as the percentage of agricultural jobs in the municipality increases. Finally, using remarkable disaggregated data, I show that in rural areas of Mexico, which tend to be agriculture-oriented, a considerable number of women are not working because there are no jobs in their locality. This suggests that one of the drivers behind the low FLPRs in Mexico could be the lack of labour demand for women in the agricultural sector.
Keywords
Female labour force participation, sectoral distribution of employment, economic development, structural transformation, labour demand
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