Female Labor Force Participation in the Economy of Pakistan

Abstract

This study investigates the determinants of female labor force participation (FLFP) in Pakistan from 1980 to 2020. Access and growth in the participation of women in the labor force is essential for the economic development of any country and can make a significant contribution to the progress of the country. This study utilizes the bounds testing approach of Autoregressive Distributed Lag (ARDL) with annual time-series data obtained from the World Development Indicators (WDI 2021) to examine both the long-run and short-run relationship between FLFP and the selected macroeconomic variables such as the Consumer Price Index (CPI), GDP per capita (GDPPC), Foreign Direct Investment (FDI), External Debt (ED), and Trade Openness (TOT). Before estimating, this is followed by a unit root test called Augmented Dickey-Fuller (ADF) test to check for stationarity. The results suggest that CPI has a positive and significant long run relationship with FLFP, while FDI and external debt have significant negative relationships, and trade openness has a significant negative relationship. The relationship of GDP per capita is positive but non-significant. The error correction model validates that around 71 percent of the deviations from the SR are corrected every year. These results indicate that macroeconomic stability and targeted policy measures are particularly important in improving the employment status of women in Pakistan.