Economic Development, Structural Change and Women’s Labor Force Participation A Reexamination of the Feminization U Hypothesis

A sizable literature claims that female labor force participation (FLFP) follows a U-shaped trend as countries develop due to structural change, education and fertility dynamics. We show that empirical support for this secular trend is feeble and depends on the data sources used, especially underlying GDP estimates. The U also tends to vanish under dynamic panel estimations. Moreover, cross-country differences in levels of FLFP related to historical contingencies are much more important than the muted U patterns found in some specifications. Given the large error margins in international GDP estimates and the sensitivity of the Urelationship we propose a more direct approach to explore the effect of structural change on FLFP using sector-specific growth rates. The results suggest that structural change affects FLFP consistent with a U-shaped pattern but the effects are small. We conclude that the feminization U hypothesis as an overarching secular trend driving FLFP in the development process has little empirical support.