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Economic growth, gender inequality, openness of trade, and female labour force participation: a nonlinear ARDL approach

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Abstract

This study examines the dynamic association between economic growth, gender inequality, trade openness, and labour force participation in Malaysia over a 40-year timeframe from 1980 to 2019. The results of the autoregressive distributed lag revealed that trade openness and female labour force participation have considerable and significant effects on economic growth. The nonlinear autoregressive distributed lag-bound test results also revealed an uneven long-term relationship between female labour force participation and economic growth. The positive and negative shocks of increased labour force participation have varying effects on Malaysia's economic growth. The Granger causality results revealed the existence of a bidirectional causal association between male and female labour force participation and a unidirectional association between economic growth and male labour force participation, trade openness and male labour force participation, as well as the gender parity index and female labour force participation. These findings suggest that more female labour force participation, a better gender parity index, and greater trade openness contribute to rapid economic growth. The findings encourage policymakers to improve institutional quality for better economic efficiency and female labour force participation in a bid to enhance overall development in Malaysia.

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Acknowledgements

This study was supported by grants from Ministry of Higher Education under the Fundamental Research Grant Scheme (FRGS/1/2019/SS08/UM/02/3).

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Authors and Affiliations

  1. Ungku Aziz Centre for Development Studies, Office of Deputy Vice-Chancellor, Universiti Malaya, Kuala Lumpur, Malaysia

    Rulia Akhtar

  2. Department of Development Studies, Faculty of Business and Economics, Universiti Malaya, Kuala Lumpur, Malaysia

    Muhammad Mehedi Masud, Nusrat Jafrin & Sharifah Muhairah Shahabudin

  3. Department of Population Sciences, Faculty of Social Sciences, University of Dhaka, Dhaka, Bangladesh

    Nusrat Jafrin

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  1. Rulia Akhtar
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Akhtar, R., Masud, M.M., Jafrin, N. et al. Economic growth, gender inequality, openness of trade, and female labour force participation: a nonlinear ARDL approach. Econ Change Restruct 56, 1725–1752 (2023). https://doi.org/10.1007/s10644-023-09488-7

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