Skip to main content

Female employment in MENA’s manufacturing sector: the implications of firm-related and national factors

Abstract

The Middle East and North Africa (MENA) region has realized significant advances toward improving women’s well-being and social status over the last few decades. However, women’s employment rate in the MENA region remains one of the lowest in the world. This paper examines the implications of firm-related and national factors for female employment in manufacturing firms located in the MENA region. The empirical analysis is implemented for firm-level data derived from the World Bank’s Enterprise Surveys database. It uses fractional logit and other econometric models to perform the estimations for female overall employment, female non-production employment, and female employment in managerial positions. The results reveal significant implications of firm-related factors, such as private foreign ownership, exporting activities, firm size, and labour composition, for female employment. They also show that national factors, such as economic development and gender equality, promote female employment. There are considerable differences in the estimated marginal effects across female employment categories. This paper provides policy-makers with directions to design strategies aiming at enhancing women’s economic opportunities and employment rates.

This is a preview of subscription content, access via your institution.

Notes

  1. Female employment rate is commonly determined as the proportion of women employed in the private and public sectors (Stevenson 2010; The World Bank 2013a).

  2. Several countries in the MENA region have dedicated significant resources to women’s education over the past few decades. For example, since the 1990s, MENA countries have enjoyed substantial growth in female enrolment in primary and secondary education, and have benefited from some progress in female enrolment in tertiary education (Morrison et al. 2008).

  3. Female labour force (workforce) participation rate is usually measured as the proportion of women aged 15 years and older who are economically active (i.e., employed or looking for jobs) (Stevenson 2010; World Bank 2013a). Hence, female employment rates and female labour force participation rates are linked, but they are not interchangeably equivalent. Note that lower rates of women participation in the labour market are typically associated with lower female employment rates. According to the World Bank (2013a), employment includes the contribution in all market production (paid work) in addition to certain types of non-market production (unpaid work). Thus, it covers the proportion of women that are currently working.

  4. Also, Chamlou et al. (2011) find that traditional social norms reduce women’s participation in the labour market in Jordan.

  5. The survey year/fiscal year are: 2002/2001 and 2007/2006 for Algeria’s firms, 2007/2005 and 2008/2007 for Egypt’s firms, 2006/2006 for Jordan’s firms, 2009/2008 for Lebanon’s firms, 2007/2005 for Morocco’s firms, 2003/2002 for Oman’s firms, 2003/2002 and 2009/2008 for Syria’s firms, and 2010/2009 for Yemen’s firms.

  6. It is worth noting that sample attrition is not a pertinent issue through the empirical analysis. Sample attrition is a common incident in panel data collected over two or more points in time. It occurs when some cross-sectional units (e.g., some firms) are dropped out from the original set over time. Attrition would generate bias if the dropped-out cross-sectional units are systematically different from those which remain in the sample. The final dataset used in this paper is characterized as a cross-section where each firm corresponds to only one observation without regard to differences in time.

  7. The World Bank’s Enterprise Surveys database includes information on the number of part-time workers. However, data covering female part-time employment are inadequate to carry out an empirical analysis through this paper. Women normally demand more part-time arrangements than men to balance between family responsibilities and work tasks. However, women on part-time jobs usually receive fewer benefits than regular full-time workers (e.g., Zeytinoglu et al. 2010). Accordingly, firm characteristics are expected to have various effects on part-time female employment.

  8. The UNDP’s GII is designed for the measurement of gender disparity. It covers female disadvantages through three dimensions: reproductive health, empowerment, and economic activities. It ranges from zero (full gender equality) to one (extreme gender inequality).

  9. The WDI’s ease of doing business indicator is a ranking score of countries according to the quality of regulatory environment in enhancing business. We inversely rank the MENA countries in our dataset, giving higher scores to more business-conducive regulatory environments. Hence, a positive coefficient on this variable would indicate a positive effect of business freedom on the dependent female employment variable.

  10. Larger firms tend to pay higher wages because they are normally expected to earn higher profits and to be more innovative and capital-intensive compared to smaller firms. They also tend to pay higher wages to compensate for disutilities in the working atmosphere (Masters 1969; Schmidt and Zimmermann 1991).

  11. Cavalcanti and Tavares (2008) show that technological progress in the household sector (through durable goods) contribute in liberating women from domestic work. This outcome eventually leads to increases in women participation in the labour market. They also find a positive relationship between GDPC and female workforce participation.

  12. Increases in female employment and workforce participation rates per se may not be necessarily a sign of a decline in gender inequality (Standing 1999; Klasen and Pieters 2012).

  13. For instance, consider estimating an equation characterized by wage as the dependent variable and schooling level as the regressor. We only observe wages of working individuals. Hence, a two-step estimation method is warranted in this case. The first step determines the probability of working, and the second step explains the wage equation after taking into account the probability of working. A corresponding two-step approach would be conceptually more difficult to adapt for the empirical analysis of female employment rates through this study.

  14. The regressions can be alternatively implemented with a binary variable that equals one for firms using E-mail as a form of business communication and zero otherwise. The corresponding results are similar to those obtained through the benchmark regressions.

  15. The percentage of female workers in total employment for manufacturing firms located in Algeria has a mean of 22.9 % and a standard deviation of 28.0 % in our dataset. The corresponding statistics for manufacturing firms located in Yemen show a considerably lower mean of 5.4 % with a standard deviation of 6.8 %.

  16. We note that the estimation of fixed effect models through non-linear regressions would give rise to incidental parameters problems in panel datasets when T is fixed and N approaches infinity (Wooldridge 2002; Li 2011). In this case, the estimates obtained from fixed effect models would be inconsistent. The dataset used in this paper corresponds to a cross-section of firm observations located in few MENA countries. The specific-effects used in our model are not firm-specific effects. They consist of a limited (finite) set of industry dummy variables that equal one when the observed firm belongs to a given industry and zero otherwise, and a limited set of country dummy variables that equal one when the observed firm is located in a given MENA country and zero otherwise. The use of industry dummy and country dummy variables does not raise identification issues such as incidental parameters because the sample size is determined by the number of firms.

  17. We note that the estimations are also implemented using the alternative fractional probit model. The corresponding marginal effects are presented in columns (1) and (2) of Table 8 of the “Appendix”. They are found to be equivalent to the results obtained through the fractional logit model.

  18. The correlation coefficient between the GII and the GDPC variables is around −0.9. Consequently, these variables are not included together in the same regression due to multicollinearity. We note that positive relationships are commonly documented in the literature between economic development and national gender equality (e.g., Weiss et al. 1976; Clark et al. 1991; Abu Ghaida and Klasen 2002; Klasen and Lamanna 2009; Cuberes and Teignier-Baqué 2011).

  19. Some indicators do not exhibit variations across MENA countries covered in the dataset. For example, the Constitution of all MENA countries covered in the dataset guarantee equality between genders before the law. Also, there are some indicators that cannot be distinguished from country-specific effects. For example, Morocco is the only MENA country in the dataset where personal law is not recognized as a valid source of law under the Constitution.

  20. The national inward FDI index is derived from the United Nations Conference on Trade and Development (UNCTAD) database, and is determined as the ratio of total inward FDI stock to gross fixed capital formation.

  21. We note that the marginal effects from estimating fractional probit models are displayed in columns (3) and (4) of Table 8 of the “Appendix”. They are found to be similar to the estimates obtained from the fractional logit models.

  22. This is commonly depicted through the glass-ceiling hypothesis which states that it is more difficult for women than for men to be promoted to top managerial positions in the workplace (Oakley 2000; Eagly and Karau 2002).

  23. The results from estimating linear probability models are presented in columns (5) through (8) of Table 8 of the “Appendix”. They are comparable to those obtained from the probit model.

  24. The empirical analysis for disaggregated manufacturing industries would entail more observations through the industries. It would also require more variations in the composition of female workers and in different firm characteristics across firms within each industry. This dimension could be explored through an extended dataset which includes observations on firms located in other countries across industries.

References

  • Abe Y (2013) Regional variations in labor force behavior of women in Japan. Jpn World Econ 28(1):112–124

    Article  Google Scholar 

  • Abu Ghaida D, Klasen S (2002) The costs of missing the millennium development goal on gender equity. The World Bank, Washington, DC

    Google Scholar 

  • Adler NJ, Izraeli DN (1994) Competitive frontiers: women managers in a global economy. Blackwell Publishing, Cambridge, MA

    Google Scholar 

  • Attanasio O, Low H, Sanchez-Marcos V (2008) Explaining changes in female labour supply in a life-cycle model. Am Econ Rev 98(4):1517–1552

    Article  Google Scholar 

  • Becker GS (1971) The economics of discrimination. University of Chicago Press, Chicago, IL

    Book  Google Scholar 

  • Bozkurt Ö (2012) Foreign employers as relief routes: women, multinational corporations and managerial careers in Japan. Gender Work Organ 19(3):225–253

    Article  Google Scholar 

  • Bratti M, Del Bono E, Vuri D (2005) New mothers’ labour force participation in Italy: the role of job characteristics. Labour 19(s1):79–121

    Article  Google Scholar 

  • Brown C, Hamilton J, Medoff J (1996) Employers large and small. Harvard University Press, Cambridge, MA

    Google Scholar 

  • Buchanan J, Scott L, Yu S, Schutz H, Jakubauskas M (2010) Skills demand and utilisation: an international review of approaches to measurement and policy development. Local Economic and Employment Development (LEED) Working Paper No. 2010/04, Organization for Economic Cooperation and Development (OECD) Publishing, Paris

  • Bussmann M (2009) The effect of trade openness on women’s welfare and work life. World Dev 37(6):1027–1038

    Article  Google Scholar 

  • Çağatay N, Berik G (1991) Transition to export-led growth in Turkey: is there a feminisation of employment? Cap Class 15(1):153–177

    Article  Google Scholar 

  • Çağatay N, Özler S (1995) Feminization of the labour force: the effects of long-term development and structural adjustment. World Dev 23(11):1883–1894

    Article  Google Scholar 

  • Cavalcanti T, Tavares J (2008) Assessing the “Engines of Liberation”: home appliances and female labor force participation. Rev Econ Stat 90(1):81–88

    Article  Google Scholar 

  • Chamlou N (2008) The environment for women entrepreneurship in the Middle East and North Africa. The World Bank, Washington, DC

    Book  Google Scholar 

  • Chamlou N, Muzi S, Ahmed H (2011) “Understanding the Determinants of Female Labor Force Participation in the Middle East and North Africa Region: The Role of Education and Social Norms in Amman.” Working Paper No. 31, AlmaLaurea Inter-University Consortium, Bologna

  • Clark R, Ramsbey TW, Adler ES (1991) Culture, gender, and labor force participation: a cross-national study. Gend Soc 5(1):47–66

    Google Scholar 

  • Contessi S, de Nicola F, Li L (2013) International trade, female labor, and entrepreneurship in MENA countries. Fed Reserve Bank St Louis Rev 94(3):197–220

    Google Scholar 

  • Cuberes D, Teignier M (2014) Gender inequality and economic growth: a critical review. J Int Dev 26(2):260–276

    Article  Google Scholar 

  • Cuberes D, Teignier-Baqué M (2011) “Gender Inequality and Economic Growth.” Background Paper for World Development Report 2012: Gender Equality and Development. The World Bank, Washington, DC

  • Curd A, Julian A, Sabow A, Seligman L (2007) The impact of foreign direct investment on Chinese women. In: Dayal-Gulati A, Finn M, Diermeier D (eds) Global corporate citizenship. Northwestern University Press, Evanston, IL

    Google Scholar 

  • Currie J, Madrian BC (1999) Health, health insurance and the labor market. In: Ashenfelter O, Card D (eds) Handbook of labor economics. Elsevier, Amsterdam

    Google Scholar 

  • Dettling LJ (2012) “Opting Back In: Home Internet Use and Female Labor Supply.” Working Paper, Department of Economics, University of Maryland, College Park, MD

  • Eagly AH, Karau SJ (2002) Role congruity theory of prejudice toward female leaders. Psychol Rev 109(3):573–598

    Article  Google Scholar 

  • Esfahani HS, Shajari P (2012) Gender, education, family structure, and the allocation of labor in Iran. Middle East Dev J 4(2):1–40

    Article  Google Scholar 

  • Fagan C (2001) Time, money and the gender order: work orientations and working-time preferences in Britain. Gend Work Organ 8(3):239–266

    Article  Google Scholar 

  • Fakih A, Ghazalian PL (2014) Which firms export? An empirical analysis for the manufacturing sector in the MENA region. J Econ Stud 41(5):672–695

    Article  Google Scholar 

  • Gaddis I, Pieters J (2012) “Trade Liberalization and Female Labor Force Participation. Evidence from Brazil.” IZA Discussion Paper No. 6809, Institute for the Study of Labor, Bonn

  • Goldin C (1995) The U-shaped female labor force function in economic development and economic history. In: Schultz TP (ed) Investment in women’s human capital and economic development. University of Chicago Press, Chicago, IL

    Google Scholar 

  • Gourieroux C, Monfort A, Trognon A (1984) Pseudo-maximum likelihood methods: theory. Econometrica 52(3):681–700

    Article  Google Scholar 

  • Greenwood J, Seshadri A, Yorukoglu M (2005) Engines of liberation. Rev Econ Stud 72(1):109–133

    Article  Google Scholar 

  • Hayo B, Caris T (2013) Female labour force participation in the MENA region: the role of identity. Rev Middle East Econ Finance 9(3):271–292

    Article  Google Scholar 

  • Hewlett SA, Rashid R (2010) The battle for female talent in emerging markets. Harv Bus Rev 88(5):101–106

    Google Scholar 

  • Hofstede GH (2001) Culture consequences: comparing values, behaviors, institutions, and organizations across nations. Sage Publications, Thousand Oaks, CA

    Google Scholar 

  • International Labour Organization (ILO) (1985) Women workers in multinational enterprises in developing countries. International Labour Organization, Geneva

    Google Scholar 

  • International Labour Organization (ILO) (2014) Global employment trends 2014: risk of a jobless recovery?. International Labour Organization, Geneva

    Google Scholar 

  • Kabeer N, Mahmud S (2004) Globalization, gender and poverty: Bangladeshi women workers in export and local markets. J Int Dev 16(1):93–109

    Article  Google Scholar 

  • Karaoglan D, Okten C (2012) “Labor Force Participation of Married Women in Turkey: Is There an Added or a Discouraged Worker Effect?” IZA Discussion Paper No. 6616, Institute for the Study of Labor, Bonn

  • Killingworth MR, Heckman JJ (1986) Female labor supply: a survey. In: Ashenfelter O, Laynard R (eds) Handbook of labor economics. Elsevier Science Publishers, New York, NY

    Google Scholar 

  • Klasen S, Lamanna F (2009) The impact of gender inequality in education and employment on economic growth: new evidence for a panel of countries. Fem Econ 15(3):91–132

    Article  Google Scholar 

  • Klasen S, Pieters J (2012) “Push or Pull? Drivers of Female Labor Force Participation during India’s Economic Boom.” IZA Discussion Paper No. 6395, Institute for the Study of Labor, Bonn

  • Kohara M (2010) The response of Japanese Wives’ labor supply to husbands’ job loss. J Popul Econ 23(4):1133–1149

    Article  Google Scholar 

  • Kutner MH, Nachtsheim CJ, Neter J (2004) Applied linear regression models, 4th edn. McGraw-Hill/Irwin, New York, NY

    Google Scholar 

  • Lee BS, Jang S, Sarkar J (2008) Women labor force participation and marriage: the case of Korea. J Asian Econ 19(2):138–154

    Article  Google Scholar 

  • Li X (2011) “Fixed Effects Estimation in Panel Nonlinear Fractional Response Models.” Working Paper No. 2011-11, Department of Economics, University of Connecticut, Storrs, CT

  • Maddala GS (1991) A perspective on the use of limited-dependent and qualitative variables models in accounting research. Account Rev 66(4):788–807

    Google Scholar 

  • Mammen K, Paxson C (2000) Women’s work and economic development. J Econ Perspect 14(4):141–164

    Article  Google Scholar 

  • Masters SH (1969) An interindustry analysis of wages and plant size. Rev Econ Stat 51(3):341–345

    Article  Google Scholar 

  • Mincer J (1962) Labor force participation of married women: a study of labor supply. In: Lewis HG (ed) Aspects of labor economics. Princeton University Press, Princeton, NJ

    Google Scholar 

  • Mitchell OS, Andrews E (1981) Scale economies in private multi-employer pension systems. Ind Labor Relat Rev 34(4):522–530

    Article  Google Scholar 

  • Moghadam V (2005) Globalizing women: transnational feminist networks. The Johns Hopkins University Press, Baltimore, MD

    Google Scholar 

  • Morrison AR, Sabarwal S, Sjöblom M (2008) The state of world progress, 1990–2007. In: Buvinić M, Morrison AR, Ofosu-Amaah AW, Sjöblom M (eds) Equality for women: where do we stand on the millennium development goals 3?. The International Bank for Reconstruction and Development/The World Bank, Washington, DC

    Google Scholar 

  • Oakley JG (2000) Gender-based barriers to senior management positions: understanding the scarcity of female CEOs. J Bus Ethics 27(4):321–334

    Article  Google Scholar 

  • Olivetti C (2006) Changes in women’s aggregate hours of work: the role of returns to experience. Rev Econ Dyn 9(4):557–587

    Article  Google Scholar 

  • Papke LE, Wooldridge JM (1996) Econometric methods for fractional response variables with an application to 401(k) plan participation rates. J Appl Econom 11(4):619–632

    Article  Google Scholar 

  • Paris LD, Howell JP, Dorfman PW, Hanges PJ (2009) Preferred leadership prototypes of male and female leaders in 27 countries. J Int Bus 40(8):1396–1405

    Article  Google Scholar 

  • Pissarides C, Garibaldi P, Olivetti C, Petrongolo B, Wasmer E (2005) Women in the labour force: how well is Europe doing? In: Boeri T, Del Boca D, Pissarides C (eds) Women at work: an economic perspective. Oxford University Press, London, UK

    Google Scholar 

  • Prieto-Rodríguez J, Rodríguez-Guitiérrez C (2003) Participation of married women in the European labor markets and the added worker effect. J SocioEcon 32(4):429–446

    Google Scholar 

  • Puhani P (2000) The Heckman correction for sample selection and its critique. J Econ Surv 14(1):53–68

    Article  Google Scholar 

  • Ramalho EA, Ramalho JJ, Murteira JM (2011) Alternative estimating and testing empirical strategies for fractional regression models. J Econ Surv 25(1):19–68

    Article  Google Scholar 

  • Rauch JE, Kostyshak S (2009) The three Arab worlds. J Econ Perspect 23(2):165–188

    Article  Google Scholar 

  • Sarbu M (2014) “Determinants of Flexible Work Arrangements.” Discussion Paper No. 14-028, Centre for European Economic Research, Mannheim

  • Sartori A (2003) An estimator for some binary-outcome selection models without exclusion restrictions. Polit Anal 11(2):111–138

    Article  Google Scholar 

  • Schmidt CM, Zimmermann KF (1991) Work characteristics, firm size and wages. Rev Econ Stat 73(4):705–710

    Article  Google Scholar 

  • Siegel J, Pyun L, Cheon BY (2011) “Multinational Firms, Labor Market Discrimination, and the Capture of Competitive Advantage by Exploiting the Social Divide.” Working Paper No. 11-011, Harvard Business School, Boston, MA

  • Smith K (2011) Labor Force Participation in the Soviet and post-Soviet Baltic States. Econ Change Restruct 44(4):335–355

    Article  Google Scholar 

  • Standing G (1999) Global feminization through flexible labor: a theme revisited. World Dev 27(3):583–602

    Article  Google Scholar 

  • Stevenson L (2010) Private sector and enterprise development: fostering growth in the Middle East and North Africa. International Development Research Center (IDRC), Ottawa

  • Tam H (2011) U-Shaped female labor participation with economic development: some panel data evidence. Econ Lett 110(2):140–142

    Article  Google Scholar 

  • Tansel A (2001) “Economic Development and Female Labor Force Participation in Turkey: Time-Series Evidence and Cross-Province Estimates.” Economic Research Forum Working Paper No. 01/05, Department of Economics, Middle East Technical University, Ankara

  • The Organization for Economic Cooperation and Development (OECD) (2012). MENA Women Entrepreneurs’ Access to Credit and Financial Services. In: Women in business: policies to support women’s entrepreneurship development in the MENA region. OECD Publishing, Paris

  • The World Bank (2011) Capabilities, opportunities and participation: gender equality and development in the Middle East and North Africa region. The World Bank, Washington, DC

    Google Scholar 

  • The World Bank (2013a) World development indicators, gender statistics. The World Bank, Washington, DC

    Google Scholar 

  • The World Bank (2013b) Gender at work. The World Bank, Washington, DC

    Google Scholar 

  • Toh SM, Leonardelli GJ (2012) Cultural constraints on the emergence of women as leaders. J World Bus 47(4):604–611

    Article  Google Scholar 

  • Wagner J (2001) A note on the firm size: export relationship. Small Bus Econ 17(4):229–237

    Article  Google Scholar 

  • Weiss JA, Ramirez FO, Tracy T (1976) Female participation in the occupational system: a comparative institutional analysis. Soc Probl 23(5):525–534

    Article  Google Scholar 

  • Wooldridge JM (2002) Econometric analysis of cross section and panel data. MIT Press, Cambridge, MA

    Google Scholar 

  • Zeytinoglu IU, Cooke G, Mann S (2010) Employer offered family support programs, gender and voluntary and involuntary part-time work. Relat Ind/Ind Relat 65(2):177–195

    Google Scholar 

Download references

Acknowledgments

The authors are grateful to two anonymous reviewers and to the editor, George Hondroyiannis, for comments and suggestions. The authors wish to thank Ragui Assaad, İpek İlkkaracan, Lars Vilhuber, and Philipp vom Berge, and the participants at the 47th Annual Conference of the Canadian Economics Association (2013), 34th Annual Meeting of the Middle East Economic Association (2014), and 20th Annual Conference of the Economic Research Forum (2014) for comments and discussions.

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Pascal L. Ghazalian.

Appendix

Appendix

See Table 8.

Table 8 Results from alternative empirical models

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Fakih, A., Ghazalian, P.L. Female employment in MENA’s manufacturing sector: the implications of firm-related and national factors. Econ Change Restruct 48, 37–69 (2015). https://doi.org/10.1007/s10644-014-9155-1

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10644-014-9155-1

Keywords

  • Female employment
  • Fractional logit model
  • Manufacturing firms
  • MENA region

JEL Classification

  • J16
  • J21
  • J23
  • J82