Determinants of Female Labour Force Participation in Jordan Alma - PowerPoint PPT Presentation

Determinants of Female Labour Force Participation in Jordan Alma Boustati UNU ‐ WIDER SOAS

Objective • To place the question in its historic, economic, and cultural context • To survey competing theories and methodologies. • To present an integrated approach to answering the question.

Content • Overview of Jordan & the Paradox of Female Labour Force Participation • Economic Theory • Methodology • Qualitative • Descriptive • Multivariate • Conclusion and moving forward

Jordan: an Overview • Small lower middle income country with an open economy. • Vulnerable to oil price fluctuations but NOT resource rich. • Agriculture is 4.2% of GDP. Urban population is 84% of the country. • The services is 66.2% of GDP and manufacturing is apparel and pharmaceuticals. • The majority are Muslims and half the population is of Palestinian origins. • Syrian refugees make up 20% of the Jordanian population (recent).

Female labour force participation in Jordan is the second lowest in the world… Labor force participation rate, female (% of female population ages 15+) 45 40 35 30 25 20 15 10 5 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Jordan Lower middle income Middle East & North Africa (excluding high income) Source: World Development Indicators

Closer inspection shows declining female labour force participation rate and low male labour force participation rates (age 15+) 66.0% 66.3% 65.6% 65.1% 64.7% 63.4% 63.8% 62.0% 60.7% 16.6% 16.5% 16.7% 16.2% 16.0% 15.8% 14.4% 13.1% 12.8% 2006 2007 2008 2009 2010 2011 2012 2013 2014 Female Male Source: Employment and Unemployment Survey, DoS 2006 ‐ 2014

Women are doing better than men when it comes to education… School enrollment, tertiary (gross), gender School enrollment, primary and secondary parity index (GPI) (gross) , gender parity index (GPI) 1.4 1.4 1.2 1.2 Gender 1 1 equality 0.8 0.8 0.6 0.6 0.4 0.4 0.2 0.2 0 0 Jordan Jordan Lower middle income Lower middle income Middle East & North Africa (excluding high income) Middle East & North Africa (excluding high income) Source: World Development Indicators

…and there has been important gains in women’s health and a decline in fertility rates Fertility Rates (Births per Woman) Maternal mortality ratio (modeled estimate, per 100,000 live births) 9 600 8 7 500 6 400 5 300 4 200 3 2 100 1 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 0 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Jordan Jordan Lower middle income Lower middle income Middle East & North Africa (excluding high income) Middle East & North Africa (excluding high income) Source: World Development Indicators

Economic theory predicts the following: Long (1958) – Mincer (1962) – Becker (1965): • Gains in productivity and increase in wages means the opportunity cost of “household production” increases. Female labour force participation rate increase • Fertility rates decline &“human capital investment” increases for women

…so what happened in Jordan? The most invoked reason is “conservative social norms” stemming form Islam or Arab culture: • Identity Economics (Akerlof and Kranton 2000) is used by incorporating an identity term in the utility function of a woman. (For MENA: Chamlou et al. 2011; Hayo and Caris 2013…) • Empirically, identity is captured by subjective questions on religiosity, “traditional identity” & gender roles . • Policy recommendations keep calling back to more education for women.

BUT it’s a rather simplistic, one ‐ dimensional approach • Endogeneity: Conservative social norms –> female labour force participation But also female labour force participation –> Conservative social norms • Mechanism: FLFP = f(education, conservative social norms) But also Conservative social norms= f(education) And… Education= f(conservative social norms) • Coefficient: Explains only 2% ‐ 5% of variation and dwarfed by other, more mainstream factors. • Identification: Biases in subjective questions.

Of course conservative social norms matter … but a more nuanced approach is required. • The transformation of the “one breadwinner family” is a recent phenomenon • What economic factors allow it to persist ? • What economic factors allow it to changes? • Demand ‐ side factors & supply ‐ side factors matter • the initial conditions prior to structural change matters (Bosserup 1970) • So does the path taken to industrialization (Goldin 1995) => Socio ‐ cultural factors are endogenous to the process of development . Examples for MENA: • Breadwinner Family: Oil revenues => high wages => "one ‐ breadwinner family” remains sustainable . (Karshenas 1997) • Dutch Disease: Oil revenues => exchange rate too high => export/labour ‐ intensive industries that “typically employ women” stopped growing . ( Assaad 2005 – on Egypt)

Methodology Following Ilkkaracan’s (2012) in Turkey • Descriptive • Economic structure, evolution & FLFPR • The cultural context • Bivariate • Cross ‐ sectional data to look at the ”stoke” (EUS) • Retrospective data to look at the ”flow” (JLMPS) • Multivariate • Using EUS: ”Classic” logit regression of female labour force participation • Independent variables include personal and household characteristics

Economic Structure and Evolution in Jordan 1960s – 1970s: Import Substitution Industrialization Strategy  Oil revenue => maintenance of high family wage  Expansion of public sector => employment opportunities for educated women  Foreign female labour ‐ low demand for less ‐ educated Jordanian women. ( Moghadam 2005) 1980s – 1990s: “ Economic Reform”  Oil price crash and Gulf War  Curtailment of public sector => negative impact on job opportunities for educated female labour. (Assaad 2014)  “Implicit policy of discouraging female employment” (Moghadem 1998; Amawi 2000)  Increase demand for foreign female labour– but why? (Frantz 2008). 2000s: Export Oriented Industrialization Strategy  Structural adjustment period => high economic growth BUT high unemployment rates. (to be continued)

The cultural context : “patriarchal social contract” • Men’s economic responsibility is explicitly stated in the law. • “Rights of men to support their families” during ISI (Olmsted 2005) • Social security/safety nets is contingent on employment => most women are excluded (except through their male next ‐ of ‐ kin) (Olmsted 2005). • Jordan ratified CEDAW ( World Bank 2013) but there are still some discriminatory articles in the labour: • Wife to get permission from husband to work. • Women excluded from some industries/time shifts. • In 2010, 1 in 3 women in Jordan has ever worked • Low FLFPR is as much a retention issue as it is a participation issue . • It also means that “rejection of women in the public sphere” isn’t necessarily a problem.

Quantitative Analysis: Scope and Limitations • EUS (2006 ‐ 2014) & JLMPS (2010) • Representative household surveys • EUS is a pooled cross ‐ section data. • JLMPS is unique because of retrospective questions . • FLFPR does NOT change in Jordan even after accounting for informality and agriculture (Flynn 1999; Assaad 2012). • Underestimation of the number of non ‐ Jordanians because these are household ‐ based surveys.

The low female labour force participation is a problem only for lower ‐ educated women. Female Labour Force Participation Rate by Educational Attainment 80% 70% 60% 2007 50% 2010 40% 2014 30% 20% 10% 0% None Primary Secondary Post ‐ secondary University Postgrad Source: Employment and Unemployment Survey, DoS 2006 ‐ 2014

The “retention issue” is the result of women dropping out upon marriage and not coming back Change in Labour Force Status of Women by Year Since Marriage 14% Percentage of Women Who Ever Worked women who drop out of the labour force the 12% year they get married 10% 8% 6% Very small return to the workforce after 4% marriage. 2% 0% ‐ 10 ‐ 8 ‐ 6 ‐ 4 ‐ 2 0 2 4 6 8 10 12 14 16 18 20 Year Since Marriage Source: Jordan Labour Market Panel Survey 2010 in LF ‐ > not in LF Not in LF ‐ > in LF in LF ‐ > in LF

The unemployment rate of women is twice that of men and the problem of discouraged workers predominantly affect women Men Discouraged Men Women Discouraged Women 35% 30% Rate of Unemployment 25% 20% 15% 10% 5% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: Employment and Unemployment Survey, DoS 2006 ‐ 2014

Unemployment is highest among university graduates and the situation is especially bad for women with university degrees. Unemployment rate in 2014 30% 25% 20% 15% 10% 5% 0% None Primary Secondary Post ‐ secondary University Postgrad Total Source: Employment and Unemployment Survey, DoS Men Women 2006 ‐ 2014