Purpose – Several studies have provided empirical evidence that female labor force participation
rate exhibits a U-shape during the process of economic development. The purpose of this paper is to
explore the existence of U-shape relationship in the case of Pakistan and if it does exist, what factors
determine this U-shape relationship?
Design/methodology/approach – For the estimation purpose data according to provinces and
regions are pooled for three years. The model is estimated using a simple fixed effect test.
Findings – The results affirm the existence of U-shaped relationship. Estimation of the pooled data
attributed this U-shape relationship with female education attainment, sectoral employment share,
unemployment rate, wages and marital status. Results confirm that high rate of economic development
is encouraging the female participation in the labor force by increasing the work opportunities for
females. The females are taking full advantage of these increased opportunities by increasing their
level of education attainment.
Research limitations/implications – In testing the U-shape hypothesis, household expenditure on
fuel consumption representing level of economic development in the country is used as the data on
GDP are not available at the provincial level.
Practical implications – This paper recommends that skill-based education programmes should be
promoted so that females could be absorbed in the formal labor market. It also recommends measures
to decrease unemployment rates and improve labor market conditions.
Originality/value – The paper is first of its kind as it applied pooled data technique for the
estimation of U-shape relationship