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Determinants of women’s labour supply in Bangladesh and Pakistan

Written by Ali Abbas

Paper category

Master Thesis

Subject

Economics

Year

2013

Abstract

Master Thesis: This thesis focuses on the supply of women’s labor in Pakistan and Bangladesh, with particular attention to demographic transition, fertility and infant mortality, women’s education and economic development. Due to the demographic transition of these two countries during this period (see Appendix A), this study uses data from 1980 to 2011. Mincer (1974; 1962) provided basic research on the supply of female labor from an economic perspective. According to Guillermo and Quentin (2003), a family with a large number of children needs more time to take care of the children, thereby reducing the labor supply for women. Similarly, if the mortality rate is relatively high, there is a possibility of high birth rates. Even if the infant mortality rate is high, it is possible for women to enter the labor market, especially if the woman is the breadwinner of the family (Jamaly and Wickramanayake, 1996). A study pointed out that childbirth may reduce the labor supply that women obtain from the job market and requires nearly two years of childbirth (Bloom, Canning, Fink, and Finlay, 2009). According to Royale (1998), women’s labor supply is closely related to their access to education. Human capital theory states that women with higher education levels participate more in the labor market than women with lower or no education. (Tomaskovic-Devey, Thomas and Johnson, 2005). Education increases the female labor supply rate by raising the qualification standards for women to meet job requirements (Tansel, 2002). A study by Achkah, Ahiadeke, and Fenny (2009) pointed out that women with elementary education are more economically active than women without education. Their research found that there is a strong positive correlation between education level and female labor supply, especially for women who have completed elementary education. Women’s education has a significant impact on low fertility and late marriage, greatly improving the health and nutrition of children (Todaro, 1994). Women’s labor supply is vital to family survival because it increases family income (Anker, 1983; Kelly, 1986; Mincer, 1962). The literature shows that there is a U-shaped relationship between female labor supply and economic development (Goldin, 1994; Tansel, 2002; Tanveer & Elhorst, 2008). In the early days of developing economies, incomes were extremely low, and women were mainly engaged in work in the agricultural sector, such as agriculture, poultry farms, and plantation. They either have lower wages or work as unpaid workers on the family farm, while also taking care of the children and other housework. This thesis is particularly interested in the demographic transition and the evolution of female labor supply in Bangladesh and Pakistan. Historically, Bangladesh and Pakistan are one country, sharing the same culture and norms. Later, in 1971, they were divided into two countries. In addition, both countries are among the top ten labor producing countries (Mazhar, 2013). In addition, the research on the focus of research, comparing data from these two countries, is limited, and this topic is still not fully explored. It is worth noting that women's participation in the market can help improve their status and enable them to participate in family decision-making regarding the number of children born and increasing family income (Muhammad & Fernando, 2010). Research Purpose The main purpose of this research is to investigate the determinants of the labor supply of women in Bangladesh and Pakistan from 1980 to 2011, in terms of demographic transition. Primary education and economic development are also used as variables. Hypothesis 1) Lower infant mortality rate (IMR) increases women’s labor supply (WLS). 2) Lower total fertility rate (TFR) increases women's labor supply (WLS). 3) There is a U-shaped relationship between economic development and female labor supply (WLS). 4) Higher primary education completion rate (EDU) increases female labor supply (WLS). The structure of this article is as follows. The second part discusses the literature review and briefly explains the variables used in the research. The third section introduces the theoretical framework and model. The fourth section explains the methodology, and the fifth section presents the results. The last part is the conclusion of the research. Ashraf, Weil, and Wilde (2013) research on Nigeria focused on the impact of fertility and its relationship with per capita GDP. The study uses the United Nations (UN) population projections with a middle fertility rate as a baseline. The study confirms that the decline in fertility will increase per capita income, and its number can be considered to have important economic significance. In addition, studies have shown that shifting from the United Nations (UN) middle-fertility population forecast to the low-fertility population forecast, per capita income will increase by 5.6% in 20 years and 11.9% in 50 years, which is economically acceptable. A comparative study conducted by Doepke (2004) in the United Kingdom, South Korea, and Brazil showed that the decline in fertility rates in all developed and industrialized countries was accompanied by a population transition from a high fertility rate to a low fertility rate. The overall repetition process varies across countries and depends on the speed of demographic transition. The main findings indicate that education and child labor policies affect the fertility rate during the transition to growth. Read Less