Barriers to Structural Transformation and the Decline in Female Employment in Early Development

Jiajia Gu, L. Rachel Ngai, and Jin Wang

This project has been retired

Small Research Grant

Female employment rates have risen in high-income countries over the past years. However, during the last three decades, data from the International Labour Organization reveals that female employment rates have been falling in developing countries, including many African countries, China, and India. Many developing countries see falling female employment rates throughout the process of structural transformation, especially as agricultural employment falls in the early stages of development. Women often face labour mobility barriers when moving out of agriculture, which could contribute to this decline in female employment rates. To analyse this trend, the research team considers the hukou system, which is a directly measurable mobility barrier in China, and uses this setting to gain insight on how female labour market frictions impact employment outcomes and gendered inequality.

This project documents stylised facts related to gender and structural transformation and builds a structural model focusing on gender and rural-urban migration that quantifies the impact of the hukou system on female employment. Combining data from multiple sources going back to 1980, including census data and multiple household surveys, the research team documents information on employment by gender in both rural and urban areas and across agriculture, manufacturing, and service industries. This data is used to determine changes in trends on female home production, employment rates, and migration and how it relates to the frictions created by the hukou system.

While the research directly focuses on the hukou system in China, the results can be generalised and provide insight to low-income countries that are also experiencing declining female employment rates as agricultural employment shares drop. Women are often constrained by home production responsibilities which limits their options in the labour market. Other constraints may include need for flexible work hours and societal attitudes towards female workers. This study provides insights to policymakers about how removing or limiting labour market frictions and mobility barriers may help alleviate falling female employment rates.

Research Team

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