Global female unemployment:An econometric study

This journal is the outcome of 15-16 July conference in Vijaywada by IMRF in which 55 research papers were presented and published relating to mainly gender studies that were contributed by several social scientists.

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  Global Female Unemployment: An Econometric Study

Dr.Debesh Bhowmik (Ex.Principal and Associate Editor-Arthabeekshan)

Abstract

The paper studied that world unemployment has been increasing at the rate of 1.335% per year during 1991-2018 in which male and female unemployment have been stipulating at the rates of 1.28% and 1.42% per year respectively during the same period.All are significant.The global female unemployment has been significantly increasing exponentially at the rate of 0.0158% per year in the study period.AR(2) process of the global female unemployment is nonstationary and significant.On the other hand ARIMA(1,1,1) model of the global female unemployment is also nonstationary.It follows random walk hypothesis and also satisfied the random walk with a drift conditions.This series showed a good fit of minimizing cycles under the Hodrick-Prescott-Filter model.

In showing the nexus between global growth rate and global female unemployment,the paper concludes that it follows the Okun’s law and one percent increase in global growth rate per year led to 0.00562% decrease in global female unemployment per year during 1991-2018 which is statistically insignificant.The nexus between the two showed bi-directional causality and cointegration in the order of one cointegrating vector.The VAR model is not quite good fit but showed stable and divergent as had been confirmed by unit root circle and impulse response functions respectively.

Key words- Global female unemployment, world unemployment, world growth, cointegration, causality, VAR

JEL- J01, C68

 I.Introduction

Female labor force participation rates vary among countries and vary with time, and it is widely believed and witnessed that female labor force participation rates are relatively high in developed countries. That rapid change of female labor force participation rates in developing and developed countries has contributed economists to pursuit of analyzing the evolution of female labor force participation in cross-countries. U-shaped hypothesis, simply, exhibits the relationship between economic development and female labor force participation and it is suggested that female labor force participation rates first decline, and then rise as the country develops. Apart from that, it is suggested that, other conditions, such as labor market conditions and household characteristics also affect the female labor force participation. Among these, educational attainment, unemployment rate, urbanization rate and industrial mix are the remarkable determinants of female labor force participation. During the process of development, especially, at the initial stages of economic development, home-based production pattern changes to market oriented production pattern. Market oriented activities dominate home-based production, henceforth, the expansion of market oriented activities or introduction of new technologies lead to a decrease in female labor force participation. After a certain point, economic development requires more female labor, and demand for female workers will increase.  Hence, female labor force participation will increase. Almost all of the studies about female labor force participation exhibit the existence of U-shaped female in the cross-country analyses. It is suggested that less developed countries have high level of female labor force participation rates. Since agricultural activities play important role, women in these countries employed as unpaid family workers, therefore female labor force participation is relatively high in less-developed countries. On the other hand, developing countries have the lowest female labor force participation rates. In an extreme example, developed countries have the highest female labor force participation rate. According to econometric results, all unemployment variables have negative effects on female labor force participation, but female

unemployment rate has, roughly, more impact than others. These results are in accordance with

“discouraged-worker effect” hypothesis, theoretically, when the unemployment rates are

relatively high, it will be more difficult for females to enter labor market, and probability of not

being employed increases. The effects of urbanization rate and total fertility rate are found to be as expected in all models; both variables have hinder female labor force participation. It should not be missed out that total fertility rate has more impact on female labor force participation rates than urban population rate; that is, when fertility rate is high, females devote themselves as a responsible for household activities. Population employed in agriculture and population employed in industry are other determinants of female labor force participation and they have positive and negative coefficient respectively.

This paper has endeavoured to analyse the global female unemployment patterns and its nexus with global growth rate during 1991-2018.

....................Please read from the Journal page 52-60.