IMF Working Papers

The Role of Structural Fiscal Policy on Female Labor Force Participation in OECD Countries

By Miyoko Asai, Qiaoe Chen, Jiro Honda, Xingwei Hu, Qianqian Zhang

September 8, 2023

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Miyoko Asai, Qiaoe Chen, Jiro Honda, Xingwei Hu, and Qianqian Zhang. The Role of Structural Fiscal Policy on Female Labor Force Participation in OECD Countries, (USA: International Monetary Fund, 2023) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper examines the role of structural fiscal policies to promote female labor force participation and reduce gender gaps in labor markets in 26 OECD countries from 2000 to 2019. As both female labor force participation and many explanatory/control variables clearly exhibit non-stationarity (potentially leading to spurious regression results), we employ a panel vector error-correction model, in contrast with most previous empirical studies on this matter. Our analyses confirm statistically significant positive impacts of government spending on (1) early childcare and education, (2) active labor market programs, and (3) unemployment benefits, all of which would help encourage women to enter the labor force, while (4) an increase in relative tax rate on second earner could have negative impact on female labor force participation.

Subject: Active labor market policies, Expenditure, Gender, Gender diversity, Labor, Unemployment benefits, Women

Keywords: Active labor market policies, Age group, Female LFPR, Fiscal Policy, Gender, Gender diversity, Global, Labor Force, OECD, Panel unit root, Panel VECM result, Panel vector error-correction model, Positive correlation, Regression analysis, Robustness test, Standard deviation, Unemployment benefits, Women

Publication Details

  • Pages:

    51

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2023/186

  • Stock No:

    WPIEA2023186

  • ISBN:

    9798400254956

  • ISSN:

    1018-5941

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