The aim of this paper is to investigate the determinants of female labour force participation (FLFP) in Macedonia.
The labour markets in this transition economy has been under continuous restructuring and reforms during the last
two decades. However, the gender gap in participation remains still high, and figures indicate that although
participation rates fluctuate, there is no clear trend towards a closing of the gap. Macedonia has the lowest
participation rate among the working population in the European and Central Asian (ECA) region, while female
inactivity rate is twice that of men and the third highest in the ECA region. It also compares very unfavourably to
the EU average of 36.7 per cent.
The empirical analysis we use household survey data conducted by the South East European University in
cooperation with UNDP Macedonia in 2009. The main objective is the identification of the determinants of FLFP
based on the neoclassical economic theory and extending it with contextual factors of the Western Balkans. The
statistical significance and effects of the theoretical determinants such as education, remittances, number of
children, illness, and other controlling variables are examined estimating a probit model through the conditional
mixed process estimator (cmp). This specific model enables the test and control for the potential endogeneity of
education, remittances, illness and children in the FFLP equation. Generally our findings suggest that education,
age, marriage, ethnicity, income and living in urban areas have positive and significant impact on FLFP.
Specifically, empirical results indicate that ethnic Macedonian women, with higher level of education, and those
that do not receive remittances are more likely to be part of the labour force.