Economic Development and Female Labour Force Participation in Jordan: A Test of the U-Shaped Hypothesis

Yaseen Mamdouh Altarawneh

Abstract


This study aims to investigate the U-shaped hypothesis between economic development -measured by per capita GDP- and female labour force participation rate (FLFPR) in Jordan. The time series data on a macro level for the period of 1990-2017 were  extracted from the World Bank Indicators (WBI). Other control variables such as female education, female unemployment rate, and urbanization were incorporated to capture the behaviour of FLFPR. The Dynamic Lease Squares (DOLS) approach was used to estimate the econometric model.  Based on the findings, the U-shaped relationship as predicted between the economic development and FLFPR was confirmed. Hence, the FLFPR in Jordan was still found to exhibit a transition towards the bottom of the U-shaped curve due to being at the early stages of economic development and expected to rest on the rising portion of the U-shaped in future. The other control variables such as education and urbanization indicated a significantly positive impact on FLFPR as expected. Furthermore, findings revealed the dominance of the Added Worker Effect (AWE) over the Discouraged Worker Effect (DWE) as the GDP per capita showed a negative and significant impact on FLFPR. Overall, findings suggest that economic growth in Jordan by itself was not sufficient to enhance FLFPRs, unless labor market conditions are revised to be more convenient to absorb more female employment. Moreover, traditional education programs should be revised to make female labor force more employable and appropriately skilled.


Keywords


Economic Development in Jordan, Female Labor Force Participation in Jordan, Labor Market in Jordan

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References


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