Family Formation, Gender and Labor Force Participation Decision in Developing Countries

Abstract

The study aims to explore the effect of family ties, age, education and gender on the employment status of individuals in developing countries. To examine the relationship between strong facility ties and economic activities, data of sixty developing economies have been extracted from World Value Survey (WVS). Principle Component Analysis (PCA) and Factor Analysis (FA) are applied to construct the index of family ties. The study reveals that the influence of strong family ties on economic behavior is much obvious in the case of females in lowincome countries. The results also describe that females as compared to males are less encouraged to work and move outside the home to participate in economic activities. Moreover, the age of individuals has a negative effect on employment status, while education illustrates a positive relationship. Thus, the findings suggest that in developing countries, females may show their preferences for joining the labor market in the presence of stronger family ties. More importantly, females and the young labor force are major chunks of the labor force in the demographic structure of the developing countries, so the contribution of females will have a positive effect on the economy and thus strong family ties may play a vital role in the progress of the developing countries.