The Role of Structural Fiscal Policy on Female Labor Force Participation in OECD Countries
IMF Working Papers, September 8, 2023
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- The Role of Structural Fiscal Policy on Female Labor Force Participation in OECD Countries
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Bibliographic details
- Authors: Miyoko Asai, Qiaoe Chen, Jiro Honda, Xingwei Hu, Qianqian Zhang
- Published: September 8, 2023
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400254956.001
Methodology and Scope
- Sample: 26 OECD countries from 2000 to 2019.
- Time span: 2000 to 2019.
- Empirical strategy: panel vector error-correction model (panel VECM) to address non-stationarity in female labor force participation and explanatory/control variables and to avoid spurious regression results.
- Contrast with prior work: uses panel VECM in contrast with most previous empirical studies on this matter.
Key Findings
- The 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 three would help encourage women to enter the labor force.
- An increase in relative tax rate on second earner could have negative impact on female labor force participation.
Policy Implications and Recommendations
- Prioritize government spending on early childcare and education to promote female labor force participation.
- Expand or strengthen active labor market programs as a tool to increase women's entry into the labor force.
- Maintain or enhance unemployment benefits where they function to facilitate female labor force participation.
- Reconsider tax policies that increase the relative tax rate on second earners, as such increases could negatively affect female labor force participation.
Analytical Notes and Keywords
- Non-stationarity considerations: female labor force participation and many explanatory/control variables clearly exhibit non-stationarity, motivating the use of panel VECM.
- Keywords/Subjects listed in the source: Active labor market policies, Expenditure, Gender, Gender diversity, Labor, Unemployment benefits, Women.
- Additional technical keywords from the source: 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.
Source: IMF Working Paper "The Role of Structural Fiscal Policy on Female Labor Force Participation in OECD Countries", Miyoko Asai, Qiaoe Chen, Jiro Honda, Xingwei Hu, Qianqian Zhang, September 8, 2023.
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