Causal Relationship Between Female Labor Force Participation Rate and Total Fertility Rate: An Empirical Evidence from Mena Countries

Abstract

This study aims to investigate the causal relationship between female labor participation rate and fertility rate in MENA countries. It uses the data of Female Labor Participation Rate (FLPR) and Total Fertility Rate (TFR) from the World Database Indicators (WDI) which spans the period from 1990 to 2020. It is a quantitative approach that applies the panel unit root test, Pedroni residual test, Vector Error Correction Model, and Granger Causality test. The findings revealed the existence of cointegration between the two variables, meaning that there is a long-run effect between FLFPR and TFR in MENA countries. Furthermore, there is the occurrence of a unidirectional causal relationship that runs from the TFR to FLFPR, in that the female labor participation rate in MENA countries depends on the total fertility rate. The results from the world economic report of 2019 showed that the MENA countries have the lowest female labor force participation in the world, and the relationship between the total fertility and female labor force participation rate is inversely proportional. MENA countries need to impose the necessary economic policies for female empowerment in the labor market. Good and effective policies for female empowerment in the labor market will provide a positive direct proportional relationship between female labor force participation and total fertility in MENA countries