Economic Growth and Female Labor Participation: The case of Rwanda

Abstract

Rwanda is known for its higher female labor participation both in the region and worldwide. Currently, it is the first country with a higher number of women in the parliament globally. However, there is still a gender gap in the labor force participation and more women are in the informal sector. This study aims at proving the U-feminization hypothesis in the case of Rwanda to determine if there is a long-run relationship between economic growth and women labor force participation. GDP per capita at constant 2010 US$ was used as an indicator of economic growth. The cointegration test used is ARDL Boundary Approach to determine if they move together in a long run. After examining the long-run coefficients, it was found that there is a U-shape relationship between economic growth in Rwanda and women labor force participation whereby the economic growth leads to a decline of women labor force participation at first but later they move along proportionally. It was also found that fertility rate affects women labor force participation and unemployment rate as well. The study also revealed that attainment of primary level for girls also reduces the female labor participation and we concluded that it is because they get motivated to continue with higher studies and thus reducing their participation in the labor force. Since there is still a huge gender gap of labor force especially in men dominated industries, this study suggests that the government establish a quota on the minimum number of women who should be in those industries as a strategy to reduce the gap because the more women work, the more it can help to reduce poverty, decrease fertility rate, and increase GDP per capita as well as income per capita hence boosting the country’s economy.