Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/90454
Authors: 
Cooray, Arusha
Gaddis, Isis
Wacker, Konstantin M.
Year of Publication: 
2012
Series/Report no.: 
Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 129
Abstract: 
We investigate the impact of foreign direct investment (FDI) and trade, as two measures of globalization, on female labor force participation in a sample of 80 developing countries over the last decades. Contrary to the mainstream view in the literature, which is mainly based on country-case studies or simple cross-country variation, we find that both, FDI and trade have a generally negative impact on female labor force participation. While the impact is of negligible economic size, it is stronger for younger cohorts, potentially reflecting a higher incentive to stay out of the labor force and invest in education in view of an increased skill premium due to globalization. We also find that the direction of the effect depends on the industrial structure of the economy. This suggests that there is no evidence of a (conditional) anti-female bias in multinational corporations' factor demand once one controls for the interaction of FDI with the size of the agricultural sector. We can thereby explain why country studies find other effects and question the generalization of their results into an overarching globalization tale concerning female labor force participation.
Subjects: 
Globalization
Labor Force Participation
FDI
Trade
Development
Hierarchical Panel Data Models
JEL: 
F0
J22
O1
Document Type: 
Working Paper

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