The Impact of Female Labor Force Participation on Regional Economic and Income Convergence

Dian Verawati Panjaitan; Nunung Nuryartono; Syamsul Hidayat Pasaribu; Jann Lay

doi:10.15408/etk.v24i2.41688

Authors

Dian Verawati Panjaitan Postgraduate Student, IPB University
Nunung Nuryartono IPB University
Syamsul Hidayat Pasaribu IPB University
Jann Lay

DOI:

https://doi.org/10.15408/etk.v24i2.41688

Keywords:

childcare, education, labor force, women

Abstract

Research originality: Women tend to be chosen as the non-labor force, even though they are potential workers who can contribute directly to the economy. Their level of education influences this contribution.

Research objectives: This research examined the impact of female labor force participation on regional economic and income convergence.

Research methods: Pooled Least Squares (PLS) and panel data estimation were conducted using cross-sectional data on 472 cities/districts across Indonesia between 2016 and 2022.

Empirical result: The findings reveal that female labor force participation significantly enhances regional economic growth only when women have at least a senior high school education. However, their contribution to accelerating economic convergence remains suboptimal, as most female workers are elementary school graduates.

Implications: To improve the contribution of the female workforce to the economy, the government should extend compulsory education from 9 to 12 years, expand access to non-formal education for women, and establish a female-friendly labor market through job flexibility and improved childcare access.

JEL Classification: I25, J21, E12, J20

Downloads

Download data is not yet available.

References

Albalate, D., Bel, G., & Mazaira‐Font, F. A. (2021). Geography and Regional Economic Growth: The High Cost of Deviating from Nature. Journal of Regional Science, 62(2), 360–388. https://doi.org/10.1111/jors.12568.

Altuzarra, A., Gálvez-Gálvez, C., & González-Flores, A. (2019). Economic Development and Female Labor Force Participation: The Case of European Union Countries. Sustainability, 11(7), 1962. https://doi.org/10.3390/su11071962.

Alvi, G. F., Safder, M., & Habib, M. (2021). Current Issues and Problems About the Quality Improvement Faced by Management in Higher Educational Institutions. Journal of Accounting and Finance in Emerging Economies, 7(1), 1–8.

Apire, J. P., Turyareeba, D., Olyanga, M. A., Katutsi, V. P., Musiita, B., & Wamala, A. S. (2023). Female Labor Force Participation and Uganda’s Economic Growth. Journal of Economics and Behavioral Studies, 15(4), 55–68.

Aprina, H., Majid, M., & Silvia, V. (2021). Does the Covid-19 Outbreak Impacts on Economic Growth? An Evidence from Indonesia. International Journal of Global Operations Research, 2(3), 88–95. https://doi.org/10.47194/ijgor.v2i3.111.

Asnawi, A., Irfan, I., & Ramadhani, M. F. C. (2020). The Gap in Economic Growth from Foreign Investment and Domestic Investment Across Provinces in Indonesia. Electronic Journal of Education Social Economics and Technology, 1(1), 34–38.

Aturupane, H. (2018). The Evolving Landscape of University Education in Sri Lanka. Sri Lanka Journal of Economic Research, 5(2), 3–19. https://doi.org/10.4038/sljer.v5i2.46.

B, A. M., Kardini, N. L., Elshifa, A., Adiawaty, S., & Wijayanti, T. C. (2023). The Role of Quality Human Resources in Developing Missions of Future Universities in Indonesian Higher Education. Munaddhomah Jurnal Manajemen Pendidikan Islam, 4(1), 49–59.

Baerlocher, D., Parente, S. L., & Rios-Neto, E. (2021). Female Labor Force Participation and Economic Growth: Accounting for The Gender Bonus. Economics Letters, 200, 109740. https://doi.org/10.1016/j.econlet.2021.109740.

Barin, N. E., Kundak, S., & Cenikli, V. S. (2020). The Effects of Female Employment on Economic Growth: An Application of Panel Data on The Member Countries of The Organisation of Islamic Cooperation. In. Grima, S., Özen, E., & Boz, H. (Eds). Contemporary Studies in Economic and Financial Analysis. Leeds: Emerald Publishing.

Barro, R. J., & Sala-i-Martin, X. (1992). Convergence. Journal of Political Economy, 100(2), 223–251.

Bawazir, A. A., Osman, A. F., & Aslam, M. (2022). Factors Affecting Female Labor Force Participation in the Middle East: An Empirical Evidence from Panel Data Approach. The Journal of Developing Areas, 56(1), 59–72.

Bình, P. T. (2021). The Solutions of Education and Training in Improving the Quality of Human Resources: The Case of Vietnam. Journal of Southwest Jiaotong University, 56(4), 733–744. https://doi.org/10.35741/issn.0258-2724.56.4.62.

Cabeza-García, L., Del Brio, E. B., & Oscanoa-Victorio, M. L. (2018). Gender Factors and Inclusive Economic Growth: The Silent Revolution. Sustainability, 10(1), 1–14. https://doi.org/10.3390/su10010121.

Cameron, L., Suarez, D. C., & Rowell, W. (2018). Female Labour Force Participation in Indonesia: Why Has it Stalled? Bulletin of Indonesian Economic Studies, 55(2), 157–192.

Chiengmai, D. N. (2018). Female Labor Force Contribution to Economic Growth. Chiang Mai University Journal of Economics, 22(3), 47–62.

Darimus, D., & Hanif, M. D. (2023). Optimizing Educational Quality in Private Madrasahs: The Influence of Human Resource Management, Organizational Culture, and Community Participation in Pekanbaru City. Potensia Jurnal Kependidikan Islam, 9(1), 94. https://doi.org/10.24014/potensia.v9i1.24238.

Destari, D. (2023). Analysis the Quality of Human Resources and the Effectiveness of Higher Education Management on Student Academic Performance at Universities in Samarinda, East Kalimantan. The Eastasouth Journal of Learning and Educations, 1(03), 84–96. https://doi.org/10.58812/esle.v1i03.157.

Dini, D., & Aji, R. H. S. (2022). Education Investment in Economic Growth Following Provinces in Indonesia in 2014-2020. Islamic Banking Jurnal Pemikiran Dan Pengembangan Perbankan Syariah, 8(1), 163–180. https://doi.org/10.36908/isbank.v8i1.480.

Fitriady, A., Silvia, V., & Suriani, S. (2022). The Impact of Macroeconomic Variables on the Real Economic Growth in Indonesia. International Journal of Global Optimization and Its Application, 1(2), 70–79. https://doi.org/10.56225/ijgoia.v1i2.16.

Fozia, M., Gillani, D. Q., & Iftikhar, A. (2022). Do Employed Females Provide Better Care to Their Children? The Case of Education and Health Care in Pakistan. Journal of Economic Impact, 4(2), 134–141. https://doi.org/10.52223/jei4022216.

Guomin, H. (2023). Existence of Problems and Solution Strategies for Reforms in Teaching Human Resource Management in Higher Education Institutions. Academic Journal of Humanities & Social Sciences, 6(25). https://doi.org/10.25236/ajhss.2023.062509.

Hasan, A. (2023). Impact of Female Labor Force Participation in Economic Development of Pakistan. Reviews of Management Sciences, 5(1), 78–91.

Ikhsannudin, M., & Pakpahan, P. L. (2021). Empowerment as a Quality Improvement Human Resources Through the Implementation of Total Quality Management. Nidhomul Haq Jurnal Manajemen Pendidikan Islam, 6(1), 41–60.

Iqbal, S., Ali, H., Yasmin, F., & Ajaz, M. B. e. (2021). Role of Educational Attainment in Married Women’s Entry into and Escape from Labor Force in Pakistan. Review of Education Administration and Law, 4(2), 381–392.

Islam, N. (1995). Growth Empirics: A Panel Data Approach. The Quarterly Journal of Economics, 110(4), 1127–1170.

Johnson, P. A., & Papageorgiou, C. (2020). What Remains of Cross-Country Convergence? Journal of Economic Literature, 58(1), 129–175. https://doi.org/10.1257/jel.20181207

Karoso, S., Handayaningrum, W., Handayani, E. W., & Yanuarti, S. (2024). The Role of Human Resource Management Strategy in Creating Superior Quality Educators. Nidhomul Haq Jurnal Manajemen Pendidikan Islam, 9(3), 596–615.

Klasen, S. (2019). What Explains Uneven Female Labor Force Participation Levels and Trends in Developing Countries? The World Bank Research Observer, 34(2), 161–197.

Kumaravelu, A., & Suresh, E. S. M. (2021). Comparison of Indian Quality Assurance Model and Accreditation Parameters of Higher Education with International Standards. Journal of Engineering Education Transformations, 35(2), 81–90.

Kurniawan, Y., Ratnasari, R. T., & Mustika, H. (2020). The Corruption and Human Development to the Economic Growth of Oic Countries. Jurnal Ekonomi Dan Bisnis Islam (Journal of Islamic Economics and Business), 6(2), 189-200.

Leško, P., Muchová, E., & Repiská, R. (2022). Dual-Model Approach to Measuring Convergence Sustainability in the Visegrad Group. Politická Ekonomie, 70(5), 597–616.

Lien, N. P. (2018). How Does Governance Modify the Relationship Between Public Finance and Economic Growth: A Global Analysis. Vnu Journal of Science Economics and Business, 34(5E), 4165. https://doi.org/10.25073/2588-1108/vnueab.4165.

Liyana, N. (2023). The Effect of Educational Inequality on Economic Growth in Indonesia. Jurnal Pajak Dan Keuangan Negara (Pkn), 5(1), 144–153.

Mankiw, N. G., Romer, D., & N.Neil, D. (1992). A Contribution to the Empirics of Economic Growth. The Quarterly Journal of Economics, CVII, 407–437.

Meilisa, M., Elfindri, E., Anas, Y., & Ariyanto, E. (2024). Short and Long-Term Impact of Educational Enrollment Rates on Economic Growth: For Indonesia’s Sustainable Development of Human Capital. Current Advanced Research on Sharia Finance and Economic Worldwide, 3(2), 235–249. https://doi.org/10.55047/cashflow.v3i2.1029.

Mendy, D., & Widodo, T. (2018). Do Education Levels Matter on Indonesian Economic Growth? Economics & Sociology, 11(3), 133–146.

Mishra, P. K., Mishra, S. K., & Sarangi, M. K. (2020). Do Women’s Advancement and Gender Parity Promote Economic Growth? Evidence From 30 Asian Countries. Millennial Asia, 11(1), 5–26. https://doi.org/10.1177/0976399619900603.

Mujahid, N., & Zafar, N. (2022). Economic Growth-Female Labour Force Participation Nexus: An Empirical Evidence for Pakistan. The Pakistan Development Review, 565–586. https://doi.org/10.30541/v51i4iipp.565-586

Novianti, T., & Panjaitan, D. V. (2022). Income inequality in Indonesia: Before and During The COVID-19 Pandemic. International Journal of Economics and Financial Issues, 12(3), 1–29.

Nuryanto, N., & Pambuko, Z. B. (2019). A Study on the Effect of Human Resource Empowerment on Productivity: Evidence from Indonesian Higher Education. Management Science Letters, 9(12), 1977–1986.

Obiageli, O. Q., Agu, C. S., Nonso, O. S., Chikodili, E., & Cynthia, C. C. (2022). Underscoring the Relationship Between Education for Women and National Development in Nigeria. SAGE, 12(2), 1–9. https://doi.org/10.1177/21582440221102429.

Olanrewaju, S., Moses, B., Moses, A., & Elizabeth, A. (2021). Female Labour Force Participation and Economic Growth Nexus: Evidence from Nigerian Economy. MPRA No. 106933.

Omran, E. A. M., & Bilan, Y. (2022). Female Labour Force Participation and the Economic Development in Egypt. European Journal of Interdisciplinary Studies Female, 14(1), 1–12.

Pratikno, Y., Hermawan, E., & Arifin, A. L. (2022). Human Resource ‘Kurikulum Merdeka’ From Design to Implementation in the School: What Worked and What Not in Indonesian Education. Jurnal Iqra, 7(1), 326–343.

Purwanto, T. G. A., & Madhakomala, R. (2023). Human Resource Management Planning Needs Analysis to Improve the Quality of Education. International Journal of Social Science and Human Research, 6(12), 61-80.

Purba, S. F. (2024). The Role of Women in East Kalimantan’s Economic Growth. Jurnal Borneo Administrator, 20(1), 43–56. https://doi.org/10.24258/jba.v20i1.1313.

Qutni, D., Kristiawan, M., & Fitriani, Y. (2021). Human Resource Management in Improving the Quality of Education. Edunesia Jurnal Ilmiah Pendidikan, 2(2), 354–366.

Rawis, J. A., Tambingon, H. N., & Lengkong, J. S. J. (2024). The Role of Leadership in Improving the Engagement and Productiv-Ity of Human Resources in Educational Institutions. Eduvest - Journal of Universal Studies, 4(10), 9654–9660.

Sabur, A., Khusaini, K., & Ramdani, H. C. (2021). Education Equality and Economic Growth in Indonesia. JEJAK, 14(1), 167–182.

Sajid, S. (2021). Economic Growth, Female Labor Force Participation Andinteracting Role of Education in Developing-8 Countries: A Sustainable Development Policy Perspective. Psychology and Education Journal, 58(1), 5263–5272.

Sala-i-martin, X. X. (1996). The Classical Approach to Convergence Analysis. The Economic Journal, 106(437), 1019–1036.

Scarborough, W. J. (2020). Occupational Gender Segregation and Economic Growth in U.S. Local Labor Markets, 1980 Through 2010. Plos One, 15(1), e0227615. https://doi.org/10.1371/journal.pone.0227615.

Subaidi, S., Sudarmaji, S., Nasuka, M., & Munasir, M. (2021). The Implementation of Human Resource Management in Improving the Quality of Teacher’s Learning. Nidhomul Haq Jurnal Manajemen Pendidikan Islam, 6(3), 579–586.

Sulisto, D., Nurhayati, N., Syafri, S., Purba, S. F., & Aritonang, K. B. (2023). Does Women’s Role Have an Influence on Economy Growth in Indonesia? Economics Development Analysis Journal, 12(3), 281–292. https://doi.org/10.15294/edaj.v12i3.67081.

Tazliqoh, A. Z. (2023). Analysis of EOQ (Economic Order Quantity) as a Basis for Controlling Multi Item Raw Materials at Laatunsa Bakery Tasikmalaya. Banking & Management Review, 11(2), 1654–1667. https://doi.org/10.52250/bmr.v11i2.679.

Thaddeus, K. J., Bih, D., Nebong, N. M., Ngong, C. A., Mongo, E. A., Akume, A. D., & Onwumere, J. U. J. (2022). Female Labor Force Participation Rate and Economic Growth in Sub-Saharan Africa: “A Liability or An Asset.” Journal of Business and Socio-Economic Development, 2(1), 34–48. https://doi.org/10.1108/jbsed-09-2021-0118.

Tsaurai, K., & Ndou, A. (2019). Infrastructure, Human Capital Development and Economic Growth in Transitional Countries. Comparative Economic Research Central and Eastern Europe, 22(1), 33–52. https://doi.org/10.2478/cer-2019-0003.

Umair, M., Ahmad, W., Hussain, B., Forțea, C., Zlati, M. L., & Antohi, V. M. (2024). Empowering Pakistan’s Economy: The Role of Health and Education in Shaping Labor Force Participation and Economic Growth. Economies, 12(5), 113. https://doi.org/10.3390/economies12050113.

Verick, S. (2018). Female Labor Force Participation and Development. Working Paper of IZA World of Labor.

Wagner, M., & Zeileis, A. (2019). Heterogeneity and Spatial Dependence of Regional Growth in the EU: A Recursive Partitioning Approach. German Economic Review, 20(1), 67–82. https://doi.org/10.1111/geer.12146

Wang, Y., & Liu, S. (2016). Education, Human Capital, and Economic Growth: Empirical Research on 55 Countries and Regions (1960-2009). Theoretical Economics Letters, 6, 347–355.

Wu, X., Ali, A., Zhang, T., Chen, J., & Hu, W. (2022). An Empirical Analysis of The Impact of Gender Inequality and Sex Ratios at Birth on China’s Economic Growth. Frontiers in Psychology, 13, 1–13. https://doi.org/10.3389/fpsyg.2022.1003467.

Zhang, X., Li, H., Wang, X., & Fleisher, B. M. (2019). Human Capital and the Economic Convergence Mechanism: Evidence from China. IZA Discussion Paper Series, IZP DP No. 12224.