## _sdn1502

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### EXECUTIVE SUMMARY
- Study focus: effect of gender-based legal restrictions and other policy choices and demographic characteristics on female labor force participation.
- Data: large and novel panel data set of gender-related legal restrictions (World Bank’s Women, Business and the Law Database) with indicators tracing legal changes back to 1960 for selected items.
- Main empirical finding: restrictions on women’s rights to inheritance and property, and legal impediments to undertaking economic activities (for example, opening a bank account or freely pursuing a profession), are strongly associated with larger gender gaps in labor force participation.
- These legal factors have a significant additional impact on female labor force participation over and above demographic characteristics and policies.
- Macro implications: gender gaps caused by these restrictions can have macro-critical effects on GDP (Figure 1 illustrates countries with estimated GDP gains of at least 15 percent from closing gender gaps).
- Policy implication: removing legal obstacles that prevent women from becoming economically active (if they choose) is associated with higher female labor force participation; reforms should aim to create a level playing field while considering countries’ cultural and religious norms.

### INTRODUCTION AND CONTRIBUTION
- Rationale:
  - Female labor force participation is both a social/development goal and important for economic growth and stability.
  - Prior work links gender equality with higher per capita GDP, competitiveness, and human development.
- Novel contributions:
  - Incorporates legal restrictions into cross-country empirical analysis.
  - Updates family policy data (based on Gauthier (2011)) and expands country coverage compared with recent studies (for example, Steinberg and Nakane 2012).
- Key legal and institutional variables associated with statistically significant decreases in the gender gap in labor force participation:
  - legally guaranteed equality between men and women;
  - equal property rights;
  - equal inheritance rights for sons and daughters;
  - joint titling for married couples;
  - women’s liberty to pursue a profession, obtain a job, or open a bank account;
  - a woman’s right to initiate legal proceedings without her husband’s permission;
  - right to sign a contract;
  - a woman’s right to be the head of a household.
- Interaction caveat: legal changes interact with social attitudes—laws may follow or lead attitudes—and these dynamics are difficult to capture empirically.

### RELATED LITERATURE — MAJOR THEMES
- Demographics
  - Fertility:
    - Evidence of a negative relationship between fertility and women’s participation in the labor force at the individual-country level.
    - Bloom and others (2009): each birth on average decreases women’s labor supply by almost two years during a woman’s reproductive life.
    - Mishra and Smyth (2010): a 1 percent increase in the fertility rate results in a 0.4 percent decrease in female labor force participation rates in G7 countries.
    - Cross-country puzzle: positive relationship between fertility and female labor force participation at the cross-country level; explained in part by men’s contribution to home production (De Laat and Sevilla-Sanz 2011).
  - Marriage: female labor force participation is negatively correlated with marriage rates.
  - Education:
    - Positive correlation between women’s educational attainment and economic participation.
    - Eckstein and Lifshitz (2011): one-third of the increase in female employment in the last century in the United States attributable to education.
    - Steinberg and Nakane (2012): a one standard deviation increase in education level in OECD countries is associated with a 3 percentage point increase in female labor force participation.
- Fiscal Policy
  - Tax policy:
    - Tax credits or benefits for low-wage earners can stimulate labor force participation by increasing net income gain from accepting a job.
    - Female labor supply is more responsive to taxes than male labor supply (IMF 2012); switching from family to individual taxation that reduces the tax burden for secondary earners can increase female participation.
  - Child care and public infrastructure:
    - Elasticity of female labor supply with respect to the price of child care ranges from –0.13 to –0.2.
    - Example implication: reducing the price of childcare by 50 percent could be associated with an increase of 6.5 to 10 percent in the labor supply of young mothers.
    - Inadequate infrastructure (electricity, running water) depresses female participation more than male participation (Norando 2010; Ghani, Kerr, and O’Connell 2013).
  - Parental leave:
    - Availability of maternity leave can encourage participation, but effects may be nonlinear.
    - Paid parental leave appears to have a negative effect on the gender gap in earnings of full-time employees (Thevenon and Solaz 2013).
    - Long absences risk reducing skills and earnings (Ruhm 1998; Edin and Gustavsson 2008).
    - Policies encouraging parity between paternity and maternity leave could support faster return to work among mothers and shift gender norms.
- Institutions
  - Gender-based legal restrictions and weak laws related to family, gender-based violence, and economic opportunities impede women’s empowerment and economic participation (Klugman and Twigg 2012; World Bank and IFC 2013).
  - More equal property rights are associated with:
    - stimulated investment by eliminating inefficiencies;
    - higher GDP per capita;
    - shifts in public spending composition toward health, education, and children (Doepke, Tertilt, and Voena 2012).
  - SIGI findings (Branisa and Klasen 2013): institutions perpetuating gender inequality associate with lower female secondary education, higher fertility rates, higher child mortality, and greater perception of corruption.
  - OECD evidence: restricted resources and assets correlate with lower GDP per capita (Figure 3).
- Signaling Effects
  - Women in leadership and quotas:
    - Women leaders can provide role models, combat stereotypes, and increase female political participation.
    - Example: Rwanda’s constitutionally guaranteed quota of 30 percent of women in Parliament has been filled and exceeded.
    - Quotas in Indian village councils increased the likelihood of women standing for elected positions and changed public attitudes, parental aspirations for daughters, and teenage girls’ aspirations (Beaman and others 2009).
  - Italy: introduction of female quotas in the 1990s "tripled the probability of voting for women" (De Paola, Scoppa, and Lombardo 2010) and increased female representation in politics (Bonomi, Brosio, and Di Tommaso 2013).

### WBL DATA, COVERAGE, AND TRENDS
- WBL indicators (seven):
  1) Accessing institutions
  2) Using property
  3) Getting a job
  4) Providing incentives to work
  5) Building credit
  6) Going to court
  7) Protecting women from violence
- Coverage and patterns:
  - WBL contains data for 143 countries on legal barriers to women’s economic participation and entrepreneurial activity.
  - For accessing institutions and using property, detailed historical data exist for 100 economies from 1960 to 2010.
  - Almost 90 percent of the economies have at least one gender-based legal restriction.
  - Some 28 countries have 10 or more restrictions on women’s participation.
  - In 79 countries there are laws that restrict women’s participation in specific professions.
  - In countries with property rights more favorable to women, there is greater financial inclusion of women ("10 percentage points more bank accounts owned by women").
- Trends and stylized facts:
  - Between 1960 and 2010, "280 changes took place in the gender-based legal framework," mostly introducing nondiscrimination clauses, female property rights, and legal ability of married women to work and pursue a profession.
  - More than half of the restrictions in accessing institutions and using property present in 1960 had been removed by 2010.
  - Specific relaxations:
    - The restriction on married women working (needing husband’s permission) was removed in 23 countries (most recently Turkey in 2001, and South Africa and Guatemala in 1998).
    - Restrictions on married women opening a bank account were relaxed in 20 countries (most recently Mozambique in 2004 and Lesotho in 2006).
  - Geographic distribution: the number of gender-based restrictions remains high in the Middle East and North Africa, sub-Saharan Africa, and South Asia; SIGI and Global Gender Gap Index rankings are highly correlated with WBL measures.

### IMPACT OF LEGAL CHANGES ON FEMALE LABOR FORCE PARTICIPATION
- Cross-country associations:
  - Equitable property rights and equal rights to obtain a job or pursue a profession are associated with lower gender gaps in labor force participation, without significantly affecting male participation rates.
  - Countries with no gender-based legal restrictions show higher average female participation and narrower ranges of participation rates.
  - Example ranges: in countries with unequal inheritance rights female participation varies from 23 percent to almost 60 percent; with equal property rights female participation is in the narrower range of 40 to 60 percent.
- Event-study style findings:
  - For countries where equity was constitutionally granted, "in 50 percent of the countries where equity was legally granted, female participation increased by some 5 percentage points in the following five years."
  - Namibia (1996 Married Persons Equality Act) equalized multiple rights and was followed by a substantial increase in female labor force participation of "10 percentage points" over the decade that followed.
  - Peru’s 1993 abolition of customary law led to a "15 percentage points" increase in female labor force participation in the decade that followed.
- Emerging markets and developing countries (key empirical findings):
  - Guaranteed legal equality reduces the gender participation gap by 1.3 percentage points.
  - The joint effect of guaranteed equity, more equal inheritance rights, and the legal right for women to be the head of a household is associated with a larger decline in gender gaps in labor force participation of around 4.6 percentage points.

### EMPIRICAL REGRESSION RESULTS AND MAGNITUDES
- OECD regressions: legal rights such as equal property rights for married and unmarried women, and the rights of women to be head of household, pursue a profession, open a bank account, sign a contract, and initiate legal proceedings are strongly associated with lower gender gaps in labor force participation.
- Demographics and policies:
  - Education has a significant positive effect on female labor force participation and shrinks the gender gap.
  - Increasing family size has the opposite effect (widening the gap).
  - Family-friendly policies such as maternity leave significantly contribute to reducing gender gaps in OECD countries.
- Quantitative magnitudes:
  - The removal of most of the legal restrictions individually leads to a reduction of "between around 2-3 percentage points" in the gender gap in labor force participation.

### POLICY-RELEVANT FINDINGS AND RECOMMENDATIONS
- Core recommendation: review and reform legal rules and institutions to remove discrimination against women to increase female labor force participation.
- Specific policy recommendations:
  - Introduce or strengthen nondiscrimination clauses and constitutionally guaranteed equity between men and women (noted as the absolute minimum).
  - Equalize property rights, inheritance rights, and joint titling for married couples.
  - Ensure women’s legal ability to pursue a profession, obtain a job, open a bank account, sign contracts, and initiate legal proceedings.
  - Adopt family-friendly policies such as child care and maternity benefits.
  - Design parental leave policies mindful of duration effects and encourage paternity leave to reduce employer discrimination and promote faster returns to work.
  - Consider tax policy reforms (for example, individual taxation or targeted tax credits) to increase incentives for female employment.
- Implementation considerations:
  - Legal reforms interact with social attitudes; laws and norms can be mutually reinforcing.
  - Liberalization of different legal restrictions may yield benefits over different time horizons:
    - Granting the right to pursue a profession could yield relatively fast gains.
    - Reforms such as inheritance rights may affect economic activity over longer horizons.
  - Design and implementation matter: the effectiveness of quota laws depends on law design, institutional context, and monitoring (for example, female activists monitoring application in Niger, per Kang 2013).
  - Recommendations are framed with respect for countries’ broadly accepted cultural and religious norms and do not prescribe identical family-work choices across contexts.

### DATA, METHODOLOGY, AND ROBUSTNESS
- Dependent variables:
  - Female Labor Force Participation (FLFP): OECD Definition: Percent of women ages 25-64 who are part of the labor force. World Bank Definition: The labor force participation rate is the proportion of the population ages 15 and older that is economically active.
  - Labor Gap (DLP): Defined as the difference between male and female labor force participation (male minus female, in percent).
- Time periods:
  - OECD: 1960–2012; World Bank: 1990–2012 for FLFP series.
  - WBL legal variables: 1960–2010.
  - Female Education (Barro and Lee): 1950–2010 (data in five-year intervals; interpolation used for intermediate years).
  - Maternity Leave (OECD Family Database): 1970–2011.
- Econometric approach:
  - Panel regressions for OECD and a wider global sample estimate male minus female labor force participation gap using country fixed effects.
  - Fertility and number of children instrumented with lags; years of schooling and legal restrictions included.
  - Hausman test indicates fixed effects are appropriate.
  - Panel unit root tests show male and female labor force participation series are I(1); differencing produces I(0) series; other nonstationary variables differenced.
  - F tests for time dummies fail to reject joint zero coefficients for years; no time fixed effects included.
- Robustness checks:
  - Alternative specifications include GDP per capita, lags of WBL variables, using FLFP instead of gap, adding childcare spending, wage gap, maternity leave, family allowance, tax wedge, part-time employment for OECD, including health and education spending for emerging markets, and using birth rate instead of fertility.
  - Several WBL variables remain significant across specifications, indicating robustness.
- Limitations:
  - WBL Database measures de-jure legal restrictions and does not capture de-facto application.
  - Policy variables were constrained by limited variability and data coverage in some samples; insufficient family policy data for emerging markets and low-income countries prevented comprehensive inclusion.

### KEY STATISTICS AND ILLUSTRATIVE CASES
- 143 countries covered in WBL.
- Detailed historical WBL data for 100 economies from 1960 to 2010.
- "280 changes took place in the gender-based legal framework" between 1960 and 2010.
- Almost 90 percent of economies have at least one gender-based legal restriction.
- Some 28 countries have 10 or more restrictions on women’s participation.
- 79 countries have laws restricting women’s participation in specific professions.
- Examples of observed post-reform increases in female participation:
  - "in 50 percent of the countries where equity was legally granted, female participation increased by some 5 percentage points in the following five years."
  - Namibia: "10 percentage points" increase over the decade after the 1996 Married Persons Equality Act.
  - Peru: "15 percentage points" increase in the decade after the 1993 abolition of customary law.
- Statistically estimated effects:
  - Guaranteed legal equality reduces the gender participation gap by 1.3 percentage points.
  - Joint effect of guaranteed equity, more equal inheritance rights, and right to be head of household associated with around 4.6 percentage points reduction in the gap.
  - Removal of most legal restrictions individually leads to a reduction of "between around 2-3 percentage points" in the gender gap in labor force participation.
- Elasticity/example: reducing the price of childcare by 50 percent could be associated with an increase of 6.5 to 10 percent in the labor supply of young mothers.
- Italy: introduction of female quotas in the 1990s "tripled the probability of voting for women."

*International Monetary Fund — FAIR PLAY, Staff Discussion Note (Executive Summary excerpt)*

### EXECUTIVE SUMMARY __________________________________________________________________________ 4

### _sdn1502 - EXECUTIVE SUMMARY __________________________________________________________________________ 4

### EXECUTIVE SUMMARY
- Study focus: effect of gender-based legal restrictions and other policy choices and demographic characteristics on female labor force participation.
- Data: large and novel panel data set of gender-related legal restrictions (World Bank’s Women, Business and the Law Database) with indicators tracing legal changes back to 1960 for selected items.
- Main empirical finding: restrictions on women’s rights to inheritance and property, and legal impediments to undertaking economic activities (for example, opening a bank account or freely pursuing a profession), are strongly associated with larger gender gaps in labor force participation.
- These legal factors have a significant additional impact on female labor force participation over and above demographic characteristics and policies.
- Macro implications: gender gaps caused by these restrictions can have macro-critical effects on GDP (Figure 1 illustrates countries with estimated GDP gains of at least 15 percent from closing gender gaps).
- Policy implication: removing legal obstacles that prevent women from becoming economically active (if they choose) is associated with higher female labor force participation; reforms should aim to create a level playing field while considering countries’ cultural and religious norms.

### INTRODUCTION: CONTEXT AND CONTRIBUTION
- Rationale:
  - Female labor force participation is both a social/development goal and important for economic growth and stability.
  - Prior work links gender equality with higher per capita GDP, competitiveness, and human development.
- Novel contributions of this note:
  - Incorporates legal restrictions into cross-country empirical analysis.
  - Updates family policy data (based on Gauthier (2011)) and expands country coverage compared with recent studies (for example, Steinberg and Nakane 2012).
- Key legal and institutional variables found associated with statistically significant decreases in the gender gap in labor force participation:
  - legally guaranteed equality between men and women;
  - equal property rights;
  - equal inheritance rights for sons and daughters;
  - joint titling for married couples;
  - women’s liberty to pursue a profession, obtain a job, or open a bank account;
  - a woman’s right to initiate legal proceedings without her husband’s permission;
  - right to sign a contract;
  - a woman’s right to be the head of a household.
- Interaction caveat: legal changes interact with social attitudes—laws may follow or lead attitudes—and these dynamics are difficult to capture empirically.

### RELATED LITERATURE — MAJOR THEMES

H3 Demographics
- Fertility:
  - Evidence of a negative relationship between fertility and women’s participation in the labor force at the individual-country level.
  - Bloom and others (2009): each birth on average decreases women’s labor supply by almost two years during a woman’s reproductive life.
  - Mishra and Smyth (2010): a 1 percent increase in the fertility rate results in a 0.4 percent decrease in female labor force participation rates in G7 countries.
  - Cross-country puzzle: positive relationship between fertility and female labor force participation at the cross-country level; explained in part by men’s contribution to home production (De Laat and Sevilla-Sanz 2011).
- Marriage: female labor force participation is negatively correlated with marriage rates.
- Education:
  - Positive correlation between women’s educational attainment and economic participation.
  - Eckstein and Lifshitz (2011): one-third of the increase in female employment in the last century in the United States attributable to education.
  - Steinberg and Nakane (2012): a one standard deviation increase in education level in OECD countries is associated with a 3 percentage point increase in female labor force participation.

H3 Fiscal Policy
- Tax policy:
  - Tax credits or benefits for low-wage earners can stimulate labor force participation by increasing net income gain from accepting a job.
  - Female labor supply is more responsive to taxes than male labor supply (IMF 2012); switching from family to individual taxation that reduces the tax burden for secondary earners can increase female participation.
- Child care and public infrastructure:
  - Elasticity of female labor supply with respect to the price of child care ranges from –0.13 to –0.2.
  - Example implication: reducing the price of childcare by 50 percent could be associated with an increase of 6.5 to 10 percent in the labor supply of young mothers.
  - Inadequate infrastructure (electricity, running water) depresses female participation more than male participation (Norando 2010; Ghani, Kerr, and O’Connell 2013).
- Parental leave:
  - Availability of maternity leave can encourage participation, but effects may be nonlinear.
  - Paid parental leave appears to have a negative effect on the gender gap in earnings of full-time employees (Thevenon and Solaz 2013).
  - Long absences risk reducing skills and earnings (Ruhm 1998; Edin and Gustavsson 2008).
  - Policies encouraging parity between paternity and maternity leave could support faster return to work among mothers and shift gender norms.

H3 Institutions
- Gender-based legal restrictions and weak laws related to family, gender-based violence, and economic opportunities impede women’s empowerment and economic participation (Klugman and Twigg 2012; World Bank and IFC 2013).
- More equal property rights are associated with:
  - stimulated investment by eliminating inefficiencies;
  - higher GDP per capita;
  - shifts in public spending composition toward health, education, and children (Doepke, Tertilt, and Voena 2012).
- SIGI findings (Branisa and Klasen 2013): institutions perpetuating gender inequality associate with lower female secondary education, higher fertility rates, higher child mortality, and greater perception of corruption.
- OECD evidence: restricted resources and assets correlate with lower GDP per capita (Figure 3).

H3 Signaling Effects
- Women in leadership and quotas:
  - Women leaders can provide role models, combat stereotypes, and increase female political participation.
  - Example: Rwanda’s constitutionally guaranteed quota of 30 percent of women in Parliament has been filled and exceeded.
  - Quotas in Indian village councils increased the likelihood of women standing for elected positions and changed public attitudes, parental aspirations for daughters, and teenage girls’ aspirations (Beaman and others 2009).

### POLICY-RELEVANT FINDINGS AND RECOMMENDATIONS
- Core recommendation: review and reform legal rules and institutions to remove discrimination against women to increase female labor force participation.
- Complementary policies:
  - adopt family-friendly policies such as child care and maternity benefits;
  - design parental leave policies mindful of duration effects and encourage paternity leave to reduce employer discrimination and promote faster returns to work;
  - consider tax policy reforms (for example, individual taxation or targeted tax credits) to increase incentives for female employment.
- Considerations:
  - Legal reforms interact with social attitudes; policymakers should be aware that changes in law and social norms can be mutually reinforcing.
  - Recommendations are framed with respect for countries’ broadly accepted cultural and religious norms and do not presume identical family-work choices across contexts.

*International Monetary Fund — FAIR PLAY, Staff Discussion Note (Executive Summary excerpt)*

### introduction of female quotas in Italy in the 1990s tripled the probability of voting for women

### introduction of female quotas in Italy in the 1990s tripled the probability of voting for women

### Key findings and headline results
- Introduction of female quotas in Italy in the 1990s "tripled the probability of voting for women" (De Paola, Scoppa, and Lombardo 2010) and increased female representation in politics (Bonomi, Brosio, and Di Tommaso 2013).
- Kang (2013) found that the success of gender quota laws in Niger depended on the design of the law, the institutional context, and having female activists monitoring its application.
- The World Bank’s Women, Business and the Law (WBL) Database covers legal and regulatory barriers to women’s economic participation in 143 countries and focuses on seven indicators of gender-related differences in the legal and institutional framework.
- For two WBL indicators—accessing institutions and using property—the dataset provides detailed information for 100 economies spanning the period from 1960 to 2010.

### Theoretical underpinnings of female labor supply (selective survey)
- Time allocation model (Becker 1965): women choose labor supply considering leisure, market labor, and home-based production (including childcare); working for a wage is chosen only if earnings cover lost home production and associated costs, implying higher elasticity of female labor supply to wages (Jaumotte 2003).
- Education and wages are key determinants in female labor supply models (Heckman and MaCurdy 1980).
- Fernandez and Wong (2014): dynamic life-cycle model with incomplete markets and risk-averse agents differing in educational endowments; divorce risk has a large impact on married women’s participation rates.
- Eckstein and Lifshitz (2011): dynamic stochastic female labor supply model with discrete choice; changes in education account for "a third of the increase in female employment" and wages explain "about 20 percent"; they model intra-family dynamics using dynamic stochastic games.

### Data and empirical strategy
- Empirical approach: panel regressions for OECD and a sample of emerging market and developing countries estimate the gender gap defined as male labor force participation rate minus female rate in country i at time t.
- Controls include fertility rate, years of schooling (Barro-Lee), number of weeks of maternity leave (OECD data only), and legal restrictions from the WBL Database; country fixed effects are included.
- The WBL Database is based on existing laws (de-jure) and does not measure de-facto application; the study relates legal restrictions to gender gaps in participation given lack of comprehensive de-facto data.

### WBL indicators and data description
- Seven WBL indicators:
  1) Accessing institutions
  2) Using property
  3) Getting a job
  4) Providing incentives to work
  5) Building credit
  6) Going to court
  7) Protecting women from violence
- Coverage and patterns:
  - WBL contains data for 143 countries on legal barriers to women’s economic participation and entrepreneurial activity.
  - For accessing institutions and using property, detailed historical data exist for 100 economies from 1960 to 2010.
  - Almost 90 percent of the economies have at least one gender-based legal restriction.
  - Some 28 countries have 10 or more restrictions on women’s participation.
  - In 79 countries there are laws that restrict women’s participation in specific professions.
  - In countries with property rights more favorable to women, there is greater financial inclusion of women ("10 percentage points more bank accounts owned by women").

### Trends and stylized facts
- Between 1960 and 2010, "280 changes took place in the gender-based legal framework," mostly introducing nondiscrimination clauses, female property rights, and legal ability of married women to work and pursue a profession.
- More than half of the restrictions in accessing institutions and using property present in 1960 had been removed by 2010.
- Specific relaxations:
  - The restriction on married women working (needing husband’s permission) was removed in 23 countries (most recently Turkey in 2001, and South Africa and Guatemala in 1998).
  - Restrictions on married women opening a bank account were relaxed in 20 countries (most recently Mozambique in 2004 and Lesotho in 2006).
- Geographic distribution: the number of gender-based restrictions remains high in the Middle East and North Africa, sub-Saharan Africa, and South Asia; SIGI and Global Gender Gap Index rankings are highly correlated with WBL measures.

### Impact of legal changes on female labor force participation
- Cross-country association:
  - Equitable property rights and equal rights to obtain a job or pursue a profession are associated with lower gender gaps in labor force participation, without significantly affecting male participation rates.
  - Countries with no gender-based legal restrictions show higher average female participation and narrower ranges of participation rates.
  - Example ranges: in countries with unequal inheritance rights female participation varies from 23 percent to almost 60 percent; with equal property rights female participation is in the narrower range of 40 to 60 percent.
- Event-study style findings:
  - For countries where equality of men and women was constitutionally granted, "in 50 percent of the countries where equity was legally granted, female participation increased by some 5 percentage points in the following five years."
  - Namibia (1996 Married Persons Equality Act) equalized multiple rights and was followed by a substantial increase in female labor force participation of "10 percentage points" over the decade that followed.
  - Peru’s 1993 abolition of customary law led to a "15 percentage points" increase in female labor force participation in the decade that followed.
- Case examples:
  - Kenya’s 2010 constitutional reform made customary law subject to nondiscrimination and set parliamentary quotas for women expected to be implemented by 2015; such constitutional reforms can lead to increases in female economic participation.

### Empirical regression results and magnitudes
- In OECD regressions, legal rights such as equal property rights for married and unmarried women, and the rights of women to be head of household, pursue a profession, open a bank account, sign a contract, and initiate legal proceedings are strongly associated with lower gender gaps in labor force participation.
- Demographics and policies:
  - Education has a significant positive effect on female labor force participation and shrinks the gender gap.
  - Increasing family size has the opposite effect (widening the gap).
  - Family-friendly policies such as maternity leave significantly contribute to reducing gender gaps in OECD countries.
- Quantitative magnitudes:
  - The removal of most of the legal restrictions individually leads to a reduction of "between around 2-3 percentage points" in the gender gap in labor force participation.

### Policy-relevant implications (drawn directly from study findings)
- Legal reforms that equalize property rights, access to institutions, and the ability of married women to work and sign contracts are associated with higher female labor force participation and smaller gender gaps.
- Introducing or strengthening nondiscrimination clauses, invalidating customary or religious law that violates nondiscrimination, and ensuring women’s rights to open bank accounts, sign contracts, and initiate legal proceedings are empirically linked to measurable increases in female participation.
- Family-friendly policies (for example, maternity leave) and improved educational attainment for women complement legal reforms in reducing gender gaps.
- Design and implementation matter: the effectiveness of quota laws depends on law design, institutional context, and monitoring (e.g., female activists monitoring application, per Kang 2013).

*Source: _sdn1502 - introduction of female quotas in Italy in the 1990s tripled the probability of voting for women_*

### 30.      Legal restrictions also strongly hinder female labor force participation in emerging

### 30. Legal restrictions also strongly hinder female labor force participation in emerging markets and developing countries

### Key empirical findings
- Legal rights—such as guaranteed equality, equal property, and inheritance rights, as well as other economic rights (for example, being allowed to head households)—are associated with smaller gender gaps in labor force participation in a statistically and economically significant way (Table 2, columns 2-8).
- Guaranteed legal equality reduces the gender participation gap by 1.3 percentage points.
- The joint effect of guaranteed equity, more equal inheritance rights, and the legal right for women to be the head of a household is associated with a larger decline in gender gaps in labor force participation of around 4.6 percentage points (Table 2, columns 9 and 10).
- Regression fits for selected countries are shown in Figure 9, comparing regression-predicted male minus female participation rates (in percent) with actual gaps for countries including Bolivia, Niger, Pakistan, Peru, Russia, Tunisia, Honduras, and Mozambique.

### Conclusions and policy recommendations (paragraphs 31–33)
- Progress has been made in removing gender-based legal restrictions, but substantial restrictions remain; these impede female labor force participation and thereby hamper productivity and sustainable and inclusive growth.
- Legal restrictions impose economic inefficiencies by restricting access to productive resources and economic choice and preventing the efficient allocation of resources.
- Policies should strive to eliminate the different types of remaining legal restrictions that prevent women from participating in the labor force, which range from preventing women from opening bank accounts to discriminatory property rights.
- Among gender-related legal rights, constitutionally guaranteed equity between men and women should be the absolute minimum because it may have an important catalytic effect on other reforms.
- Countries should strive to guarantee legal equality to women in all dimensions. Liberalization of different legal restrictions may yield benefits over different time horizons:
  - Granting the right to pursue a profession could yield relatively fast gains.
  - Reforms such as inheritance rights may work through indirect channels and affect other economic activity over longer horizons.
- The note advocates a level playing field rather than prescribing a normative stance on women's participation; removing obstacles would give women the option to become economically active should they so choose.
- Policy recommendations should be considered against the backdrop of countries’ broadly accepted cultural and religious norms.

### Data sources, variables, and coverage
- Dependent variable: Female Labor Force Participation (FLFP)
  - OECD Definition: Percent of women ages 25-64 who are part of the labor force.
  - World Bank Definition: The labor force participation rate is the proportion of the population ages 15 and older that is economically active.
  - Sources: OECD Database on Labor Force Statistics; World Development Indicators (Original source: International Labor Organization).
  - Time Period: OECD: 1960–2012; World Bank: 1990–2012.
- Labor Gap (DLP): Defined as the difference between male and female labor force participation (male minus female, in percent).
- Demographic variables:
  - Number of Children per Woman (OECD) / Fertility Rate (World Bank).
  - Sources: OECD Database on Labor Force Statistics; World Development Indicators (Original source: United Nations).
  - Time Period: OECD and World Bank: 1960–2012.
- Female Education: Average years of education attained by females over age 25.
  - Source: Barro and Lee (2014) Educational Attainment Dataset.
  - Time Period: 1950–2010 (data in five-year intervals; interpolation used for intermediate years).
- Policy variables:
  - Maternity Leave: Number of weeks for which a pregnant woman is entitled to leave work before and after childbirth regardless of income support.
  - Source: OECD Family Database.
  - Time Period: 1970–2011.
- Legal variables:
  - Source: World Bank Women, Business and the Law Database.
  - Countries covered include (selected from dataset): Algeria, Angola, Argentina, Australia, Austria, Bangladesh, Belarus, Belgium, Benin, Bolivia, Botswana, Brazil, Bulgaria, Burkina Faso, Cambodia, Cameroon, Central African Rep., Chile, China, Colombia, Congo, Dem. Rep., Costa Rica, Côte d'Ivoire, Dominican Republic, Egypt, Arab Rep., Ethiopia, Fiji, France, Gabon, Georgia, Germany, Ghana, Guatemala, Honduras, Hungary, India, Indonesia, Iran, Islamic Rep., Italy, Jamaica, Japan, Jordan, Kazakhstan, Kenya, Korea, Rep., Kyrgyz Republic, Lao PDR, Lesotho, Liberia, Madagascar, Malawi, Malaysia, Mali, Mauritania, Mexico, Mongolia, Morocco, Mozambique, Namibia, Nepal, Netherlands, Nicaragua, Niger, Nigeria, Norway, Pakistan, Papua New Guinea, Paraguay, Peru, Philippines, Portugal, Russian Federation, Rwanda, Senegal, Sierra Leone, Singapore, South Africa, Spain, Sri Lanka, Sudan, Swaziland, Sweden, Switzerland, Syrian Arab Republic, Tajikistan, Tanzania, Thailand, Togo, Tunisia, Turkey, Uganda, Ukraine, United Kingdom, United States, Uzbekistan, Venezuela, R.B., Vietnam, Yemen, Rep., Zambia, Zimbabwe.
  - Time Period: 1960–2010.
  - Variables described in Box 2 in the main text; methodology for the 50 Years of Women’s Legal Rights Database follows World Bank/International Finance Corporation (2013).
- Sources cited for datasets and methodology include the World Bank Women, Business and the Law Database and Barro and Lee (2014).

### Econometric methodology and robustness
- Panel regressions estimate the male minus female labor force participation gap for OECD and a wider global sample using country fixed effects.
- Fertility rate and number of children are instrumented with lags to mitigate endogeneity.
- Years of schooling come from the Barro-Lee database; maternity leave measures number of weeks provided.
- Legal restrictions are included from the WBL database.
- Hausman test indicates fixed effects are appropriate.
- Panel unit root tests show male and female labor force participation series are I(1); differencing produces I(0) series. Other nonstationary variables (fertility, education) are differenced.
- F tests for time dummies fail to reject joint zero coefficients for years, so no time fixed effects are included.
- Robustness checks include alternative specifications:
  1. Including GDP per capita.
  2. Including lags of WBL variables.
  3. Using female labor force participation instead of the gap as the dependent variable.
  4. For OECD sample: adding childcare spending, wage gap, maternity leave, family allowance, tax wedge, and part-time employment.
  5. For emerging markets and developing countries: including health and education spending.
  6. Using birth rate instead of fertility rate.
- Several WBL variables remain significant across specifications, indicating robustness.
- Policy variables were also used as explanatory variables, but for the OECD sample limited variability and reduced sample size constrained inference; insufficient family policy data for emerging markets and low-income countries prevented comprehensive inclusion.

*Source: IMF staff estimates, annexes, and conclusions from the document excerpt.*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/sdn/2015/_sdn1502.pdf_