Structural Transformation in Female Labor Force and its Impact on GDP per Capita: A Comparative Study of Emerging Economies with respect to the U-Shaped Hypothesis

Abstract

Many studies show that as countries move on the road to economic development, female labour force participation falls in the initial stages and then rises. This study explores different reasons for this trend across many regions on one hand, and on the other undertakes the case of five emerging economies- India, Bangladesh, Turkey, Indonesia, and Pakistan- and determines whether FLFP adds more to GDP per capita when it undergoes a sectoral shift. Using a dataset for these countries across 32 years (1992 to 2023), the fixed-effect panel regression model is applied to analyse the relationship between female employment and economic growth, particularly when the female labor force moves from the agriculture sector to the industry or services sector. And here is the research gap that the paper addresses; where past studies anchor on growth followed by the initial fall and the eventual rise of FLFP, this study instead determines whether FLFP accelerates economic growth. The findings reveal that FLFP is in fact a significant contributor to economic growth and a shift from agriculture into industry and services sectors - highlighting a ‘structural transformation’ - plays an important role in increasing GDP per capita. Therefore, the paper concludes that for emerging economies to improve long run economic performance, policies that encourage FLFP - such as the provision of safe childcare facilities, flexible working hours, education, vocational training, and the formalisation of women’s employment - should be introduced, allowing female labour force’s economic contributions to be reflected more accurately in official labour statistics and national income accounts.