The Pakistan Development Review 41:4 Part II (Winter 2002) pp. 495–513
How Do Women Decide to Work in Pakistan?
ZAREEN F. NAQVI and LUBNA SHAHNAZ* 1. INTRODUCTION The incidence of women labour force participation is very low in Pakistan. According to the Labour Force Survey, 1999-2000 female participation rate was merely 14 percent of the total labour force. Even though average annual growth rate of female labour force participation has been increasing slightly in Pakistan; it was 4 percent in 1980-99 and has gone up to 5.1 percent during 1995-98,1 however, this rate is still very low as compared to the other South Asian countries—42 percent in Bangladesh, 41 percent in Nepal, 32 percent in India and Bhutan, 37 percent in Sri Lanka [World Bank (2002)]. This paper is an attempt to identify household related factors that lead to women participation in the economic activities. This issue has been taken up in a number of other studies.2 The innovative aspect of this paper is that it relates women’s decision to participate in economic activities with their empowerment—who makes the decision to participate in the labour force—whether it is the women themselves or others. We would like to state at the very onset that this paper is a first cut to explore the issues of women’s participation in economic activities and their and empowerment. We hope to get feedback in the conference to improve the technical aspects of this paper and explore other aspects of this issue. Some key empirical findings of this paper are that the women economic participation is significantly influenced by factors such as their age, education and marital status. The employment status of the head of the household (generally a male), presence of male member, and children of ages 0–5 are also important variables that significantly affect women’s participation in economic activities. We identified marital status, education level, family size, household’s financial status and area of residence as the main causal factors behind women making their own decisions about paid employment. Zareen F. Naqvi is a Senior Economist at the World Bank, Islamabad. Lubna Shahnaz is a doctoral candidate in the Economics Department at Quaid-i-Azam University, Islamabad. Authors’ Note: The views presented in this paper are those of the authors and not of the organisation in which they work. 1 See Labour Force Survey 1997-98 for detail. 2 Hafeez and Ahmed (2002); Malik, et al. (1994); Kozel and Alderman (1990); Rashed, Lodhi and Chishti (1989); Shah (1986) and Shah, et al. (1976).
Naqvi and Shahnaz
The paper divided into six sections. First section presents the introduction, second describe the relevant literature. In the third section the estimation techniques are discussed while data source and variables are explain in section four, respectively. The results of the estimation are illustrated in the fifth section. The paper is ended by section six, which offer some concluding remarks and policy implications. 2. LITERATURE REVIEW This section reviews the literature on labour force participation (hereafter LFP) and labour supply both within and outside Pakistan. The traditional theory of utility maximisation, Becker (1965) developed a theoretical model of time allocation. Time is used as an additional commodity in the utility maximisation process. The study assumes that the households are producers as well as consumers. They produce commodities by combining inputs of goods and time. The effect of changes in earning, other income, prices of goods, and the productivity of working and consumption time on the allocation of time and commodity set produced have been analysed. For example, an increase in wage rate would induce a decline in the amount of time used on consumption activities and an increase in market production because time would become relatively more expensive. Goods would be partly substituted for time in the production of each commodity and goods intensive...
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