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Relationship between Female Labor Force Participation and Economic Growth of Pakistan
Fatima
Abstract:
The empirical knowledge of understanding the importance of increased female participation in the labor market can help the economic growth of country. To this objective, this paper provides empirical analysis of relationship between female labor force participation and economic growth of Pakistan using annual time series data from 1993 to 2023. ARDL based cointegration and Error-correction model (ECM) is used to estimate short-run and long-run elasticities. The results shows that female’s participation in workforce has positive and significant effects on Gross Domestic Product in the long run, showing that 1 percent increase in FLFP lead to increase GDP by 0.098%. However, these effects are negative in the short-run and this may be due to limited job opportunities and many structural challenges in the labor market may faced by females. The speed of adjustment coefficient, based on ARDL Error Correction model, indicates that Gross Domestic Product is adjusted by about 87% and restored to long-run equilibrium after a short-run shock that takes place within the first year. The study also revealed that higher female education has positive effects in improving GDP. In particular, this research highlights the importance of women empowerment through improved education access, employment opportunities and supportive polices. Lastly, this study provides recommendations for policymakers to encourage sustainable economic growth by investing in women’s development, removing cultural barriers, and enhancing vocational training of females.
Keywords:
Female labor force participation; Economic growth; Pakistan; ARDL; Female education; Error correction model
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