This study assesses the impact of globalization on female participation in the labor force (FPLF). The increased globalization in the last several decades has created various economic opportunities for enterprises and individuals worldwide at an unprecedented rate. As a result, it has helped improve the quality of life for many men and women. In this process, the issue of women’s economic participation has been a critical topic for discussion worldwide. In that context, the objective of the paper is to determine if FPLF is influenced by a country’s participation in foreign markets through foreign direct investment (FDI) – a proxy for globalization. The paper uses a panel dataset obtained from the World Bank’s World Development Indicators database for 99 countries from 2001 to 2018. We then use system Generalized Method of Moments (system GMM) to estimate a dynamic panel model with appropriate specification tests. The results show that the positive effects of FDI on FPLF are more robust for low- and middle-income countries than high-income countries. We also find that results may be sensitive to outlier observations. Our results explain the seemingly inconclusive results within existing literatures and suggest that low- and middle-income countries should particularly focus on sectors that generate FDI as they stand to yield the greatest benefits with regards to female economic empowerment.

The objective of the paper is to examine whether female participation in the labor force (FPLF) is influenced by a country’s participation in international markets through foreign direct investment (FDI)—a proxy for globalization. We obtained a panel dataset from the World Development Indicators database for 99 countries from 2001 to 2018, and used the system generalized method of moments (system GMM) to estimate a dynamic panel model with appropriate specification tests. The results show that FDI encourages FPLF to some extent, but the positive effects are more robust for low- and middle-income countries than high-income countries. We also found that results are sensitive to extreme outlier observations in the explanatory factor FDI. These results have important policy implications for low- and middle-income countries; they recommend a focus on sectors that generate higher FDI, as these sectors stand to yield the greatest benefits with regards to female labor force participation.