Economic Cycle and Deceleration of Female Labor Force Participation in Latin America

Abstract

In this paper we analyze the role of economic growth in the recent deceleration of female labor force participation (LFP) in Latin America. We study the relationship between the business cycle and female LFP by estimating fixed effects models, using data from harmonized national household surveys of 18 countries in the period 1987-2014. We find that female LFP follows a countercyclical pattern, especially for vulnerable women, which may be explained by the added-worker effect. The sudden and fast increase in economic growth in the 2000s is then a likely relevant factor behind the deceleration in female LFP. We also provide evidence that the increase in social protection is another factor associated with the deceleration of female labor supply in the region.