The Impact of Financial Access on Female Labour Force Participation: Evidence from Panel Estimation

  • Khai Ying Eng Economic Section, School of Social Sciences, Universiti Sains Malaysia (USM)
  • Chee-Hong Law Economic Section, School of Social Sciences, Universiti Sains Malaysia (USM)
  • Yiing Jia Loke Economic Section, School of Social Sciences, Universiti Sains Malaysia (USM)
Keywords: financial access, female labour force participation, panel data, generalized system method of moments

Abstract

This paper examines the relationship between financial access and economic empowerment among females, i.e., female labour force participation by testing a panel data of 51 countries ranging from 2004 to 2016. The number of bank branches and automated teller machines, both in thousand square feet and a hundred thousand adults, are applied as financial access indicators. The estimation method employed is the dynamic panel system generalized method of moment estimators. The control variables in the equation are the life expectancy, gross domestic product per capita, and female education enrolment. The results showed that bank branches have more noticeable impacts than automated teller machines in affecting the female labour force participation rate, implying that bank branches' services have a more substantial influence on women empowerment than automated teller machines. Furthermore, financial access indicators show a negative association with female labour force participation, probably due to female discrimination in financial access or the income effect caused by better financial access. Another possible reason is that the development policies could have bypassed women, as indicated by previous studies. To overcome this situation, governments could improve their financial service to ensure that financial access benefits women empowerment, including exploring the microfinance and special loans for female borrowers.

Statistics
Abstract views: 170 , PDF downloads: 141

Downloads

Download data is not yet available.

References

Aboohamidi, A., & Chidmi, B. (2013). Female Labor Force Participation in Pakistan and Some MENA Countries. Paper presented at the Southern Agricultural Economics Association Annual Meeting, Orlando, FL. Abstract retrieved from file:///C:/Users/k/Downloads/SAEAAboohmaidi_Chidmi%20(1).pdf

Alexander A. C. (2007). Empowering Women: The Role of Economic Development, political culture and institutional design in the world societies (CSD Working paper). https://escholarship.org/uc/item/4974t33n

Almiman, A. A., Pradikta, A. C., & Altamimi, R. (2020). Factors Determining Female Labor Participation in Job Market in the Middle East and North Africa (MENA) Countries. Populasi, 28(1), 44-62.

Anyanwu, John C., & Augustine, D. (2013). Gender Equality in Employment in Africa: Empirical Analysis and Policy Implications. African Development Review, 25(4), 400-420.

Baslevent, C., & Onaran, O. (2003). Are Married Women in Turkey More Likely to Become Added or Discouraged Workers? Labour, 17(3), 439-458.

Batliwala, S. (1994). The Meaning of Womenʹs Empowerment: New Concepts from Action. In G. Sen, A. Germain and L. C. Chen (Eds.), Population Policies Reconsidered: Health, Empowerment and Rights (pp. 127‐38). Boston: Harvard University Press.

Birdsall, N., & Griffin, C. (1988). Fertility and Poverty in Developing Countries. Journal of Policy Modeling, 10(1), 29-55.

Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87(1), 115-143.

Callen, M., De Mel, S., McIntosh, C., & Woodruff, C. (2014). What are the Headwaters of Formal Savings? Experimental Evidence from Sri Lanka. (NBER Working Paper No. 20736). https://www.nber.org/papers/w20736.

Chaudhary, R., & Verick, S. (2014, October). Female labour force participation in India and beyond. (ILO Working Papers). https://www.ilo.org/wcmsp5/groups/public/%40asia/%40ro-bangkok/%40sro-new_delhi/documents/publication/wcms_324621.pdf

Cheston, S., & Kuhn, L. (2002). Empowering women through microfinance. In S. Daley-Harris (Ed.), Pathways out of poverty: Innovation in microfinance for the poorest familiars (pp. 67–228). Bloomfield, CT: Kumarian Press

Cook, R. D. (1977). Detection of Influential Observation in Linear Regression. Technometrics, 19, 15-18.

Degryse, H., & Ongena, S. (2005). Distance, lending relationships and competition. The Journal of Financial, 60, 231-266.

Department of Economic and Social Affairs (2009). World Survey on the Role of Women in Development: Women’s Control over Economic Resources and Access to Financial Resources, including Microfinance. New York. Retrieved from http://undocs.org/en/A/64/93

Dhakal, T. N., & Nawaz, F. (2009, December). Strategy for Improving Human Capital in Bangladesh and Nepal: Does it help for women empowerment. Paper presented at the Network of Asia-Pacific Schools and Institutes of Public Administration and Governance (NAPSIPAG) Annual Conference Malaysia. Abstract retrieved from file:///C:/Users/k/Downloads/SSRN-id2222532.pdf

Duflo, E. (2012). Women’s empowerment and economic development. Journal of Economic Literature, 50(4), 1051-1079.

Ejaz, M. (2007). Determinants of female labour force participation in Pakistan an empirical analysis of PSLM (2004-05) Micro Data. Lahore Journal of Economics, 12, 204-235.

Friedman, J. (1992). Empowerment. The politics of an alternative development. Oxford: Basil Blackwell.

Ghani, E., Mani, A., & O'Connell, S. (2013). Can political empowerment help economic empowerment? Women leaders and female labour force participation in India (Policy Research Working Paper 6675). http://documents1.worldbank.org/curated/en/655271468284122309/pdf/WPS6675.pdf

Hamida, E.B. (2000). Empowering Women through Microcredit: A case study from Tunisia. Paper presented at the MDF3: Civil Society Workshop, Cairo, Egypt. Abstract retrieved from http://www.endatamweel.tn/wp-content/uploads/2016/05/Empowering-Women-Through-Micro-Credit-A-Case-Study-from-Tunisia.pdf

Han, R., & Melecky, M. (2013). Financial inclusion for financial stability: Access to bank deposits and the growth of deposits in the global financial crisis (MPRA Working Paper No. 48338). Retrieved from https://mpra.ub.uni-muenchen.de/48338/

Holloway, K., Niazi, Z., & Rouse, R. (2017). Women’s Economic Empowerment through financial inclusion: a review of existing evidence and remaining knowledge gaps. New Haven, CT: Innovations for Poverty Action. Retrieved from https://www.poverty-action.org/sites/default/files/publications/Womens-Economic-Empowerment-Through-Financial-Inclusion.pdf

Holvoet, N. (2005). The impact of microfinance on decision‐making agency: evidence from South India. Development and Change, 36(1), 75-102.

Jayachandran, S., & Lleras-Muney, A. (2009). Life Expectancy and Human Capital Investments: Evidence from Maternal Mortality Declines. Quarterly Journal Economics, 124(1), 349–398.

Kabeer, N. (2005). Gender Equality and Women’s empowerment: A Critical Analysis of the Third Millennium Development Goal. Gender and Development, 13(1), 13-24.

Kabeer, N. (2012). Women’s Economic Empowerment and Inclusive Growth: Labour Markets and Enterprise Development (SIG Working Paper 2012/1). Retrieved from https://www.idrc.ca/sites/default/files/sp/Documents%20EN/NK-WEE-Concept-Paper.pdf

Kapsos, S., Silberman, A., & Bourmpoula, E. (2014). Why is female labour force participation declining so sharply in India? (ILO Working Paper No. 10). Retrieved from https://www.ilo.org/wcmsp5/groups/public/---dgreports/---inst/documents/publication/wcms_250977.pdf

Karim, L. (2011). Microfinance and Its Discontents: Women in Debt in Bangladesh. MN: University of Minnesota Press

Karshenas, M., & Moghadam, V. (2001). Female Labor Force Participation and Economic Adjustment in the MENA Region. The Economics of Women and Work in the Middle East and North Africa, 4, 51-74.

Klasen, S., & Pieters, J. (2013). What Explains the Stagnation of Female Labor Force Participation in Urban India? (IZA DP Working Paper 7597). Retrieved from http://ftp.iza.org/dp7597.pdf

Kottis, A. P. (1990). Shifts Over Time and Regional Variation in Women’s Labor Force Participation Rates in a Developing Economy. Journal of Development Economics, 33(1), 117-132.

Lahoti, R., & Swaminathan, H. (2013). Economic development and female labour force participation in India (IIMB Working Paper No. 414). Retrieved from https://www.iimb.ac.in/sites/default/files/2018-07/WP_No._414_0.pdf

Lincove, J. A. (2008). Growth, girls’ education, and female labor: A longitudinal analysis. The Journal of Developing Areas, 41(2), 45-68.

Malhotra, A., & Schuler, S.R. (2005). Women’s empowerment as a variable in international development. Paper presented at the World Bank Workshop on Poverty and Gender: New perspectives. Abstract retrieved from https://www.academia.edu/17726621/Measuring_womens_empowerment_as_a_variable_in_international_development

Mayoux, L. (2005). Women’s Empowerment through Sustainable Microfinance: Rethinking Best Practice. Enterprise Development Impact Assessment Information Service. Retrieved from https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.121.2948&rep=rep1&type=pdf

Montgomery, H., & Weiss, J. (2011). Can commercially-oriented microfinance help meet the millennium development goals? Evidence from Pakistan. World Development, 39, 87-109.

Morsy, H. & Youssef, H. (2017). Access to Finance: Mind the Gender Gap (EBRD Working Paper No. 202). Retrieved from file:///C:/Users/k/Downloads/WP_202%20(1).pdf

OECD (2011, April). Women Economic Empowerment (OECD-DAC GENDERNET Issues Paper) Retrieved from http://www.oecd.org/social/gender-development/47561694.pdf

Ortiz-Ospina, E., & Tzvetkova, S. (2018). Women’s employment. Retrieved from https://ourworldindata.org/female-labor-supply?preview_id=13372&preview_nonce=6d1f899c93&_thumbnail_id=-1&preview=true
Pitt, M. M., S.R. Khandker & J. Cartwright (2006). Empowering women with microfinance: Evidence from Bangladesh. Economic Development and Cultural Change, 54, 791-831.

Psacharopoulos, G., & Tzannatos, Z. (1989). Female labour force participation: An international perspective. The World Bank Research Observer, 4(2), 187-201.
Rigol, N., Pande, R., Field, E., Schaner, S., & Moore, C. T. (2016, November). On Her Account: Can Strengthening Women's Financial Control Boost Female Labor Supply? (HBS Working Paper). Retrieved from https://www.hbs.edu/faculty/Pages/item.aspx?num=56847

Sarma, M. (2008, June). Index of financial inclusion (CRIER Working Paper No. 215). http://www.icrier.org/pdf/Working_Paper_215.pdf

Siddik, M. N. A. (2017). Does financial inclusion promote women empowerment? Evidence from Bangladesh. Applied Economics and Finance, 4(4), 169-177.

Sophastienphong, K., & Kulathunga, A. (2008). Getting finance in South Asia 2009: indicators and analysis of the commercial banking sector. Washington D.C.: World Bank.

Swamy, V. (2014). Financial inclusion, gender dimension and economic impact on poor households. World Development, 56, 1-15.

Thabethe, E. (2006, Jan 30). Limpopo workshop on gender and women’s economic empowerment strategy. Retrieved from https://www.gov.za/e-thabethe-limpopo-workshop-gender-and-womens-economic-empowerment-strategy#

Vaill, S. (2003). More than Money: Strategies to build women’s economic power (Impact Report No. 1: Economic Opportunity Initiative). San Francisco: The Global Fund for Women.

Witbooi, M., & Ukpere, W. (2011). Academic Journals Indigenous female entrepreneurship: Analytical study on access to finance for women entrepreneurs in South Africa. African journal of business management, 5, 5646-5657.

World Bank (2014) Global Financial Development Report 2014: Financial inclusion. Washington, D.C.: World Bank.
Published
2021-03-08
How to Cite
Eng, K. Y., Law, C.-H. and Loke, Y. J. (2021) “The Impact of Financial Access on Female Labour Force Participation: Evidence from Panel Estimation”, Malaysian Journal of Social Sciences and Humanities (MJSSH), 6(3), pp. 259 - 271. doi: https://doi.org/10.47405/mjssh.v6i3.680.
Section
Articles