Cuarta Etapa: Segunda y tercera subvención

The chapter enlightens the analysis of the labour market status of women in Pakistan. In this re- gard, two labour market states working and not working have been further enumerated into four categories each and discussed in detail. Labour market states of working include paid employee, unpaid family helper, self-employed (agriculture sector) and self-employed (non-agriculture sec- tor), whereas, not-working states include ill or handicapped, student, housekeepers, and others.

Having defined these states, further, the determinants of labour market participation has been explored. The demand side and supply side factors include women’s own and household charac- teristics that effect her decision to participate in the labour force. Therefore, the explanatory vari- ables used in the analysis are age, age-squared, education, marital status, women headed house, ownership of house, number of dependents, number of children, working people in the family, co-residence, household income, household income-squared, regional dummy and year dummy.

Pooled data has been constructed from PSLM (2004-09) cross-section data sets. Multinomial logit model has been applied by taking firstly working states of women as the dependent variable against the explanatory variables and using not-working as base category and then, considering not-working states as the dependent and working as base category.

To capture the complete picture of labour market in Pakistan, results have been repeated for working men and non-working men and comparison is made. In this regard, four models have been estimated.

The main findings shows that age has a positive and significant impact on all the states of working males and females in labour market with the exception of men as unpaid family helper. Married woman, having more than 2 children or those who own a house, or belong to a joint family or reside in urban areas are less likely to participate in the paid employment. However, married men, or those who own a house or live in urban area are more likely to participate in paid employment. The higher the number of working people in the household, greater the likelihood of participating in all states of employment for both males and females. However, an increase in the number of children lowers the probability of being in paid employment, but raises the probability of self employment for both the genders. Similarly belonging to a joint family lowers the probability for men and women being involved in all the working categories with the exception of unpaid family helper which is high for male. Having more dependents in the household appears

to have no impact on women being involved in any kind of work. On the other hand, for men the likelihood of paid and unpaid is more and self-employment is high relative to not working. It has been found that household income has a higher probability for women to work in any of the working state of labour force, but as the income increases considerably the situation is conversed. However, in the case of males, when income increases too much, it lowers the probability of being in paid employment and self-employment (agriculture) and the likelihood of being unpaid family helper and self-employed in non-agriculture becomes high.

In addition to that, the empirical findings considering men and women not-working as the dependent variable show that age has lower probability of not being a part of labour market in case of both genders. With an increase in age up to a certain level, there is a lower probability of being in any of not-working category relative to working. More years of schooling raise the probability of being in the status of student relative to work. Marital status of both the genders lowers the probability of being ill, a student or having other reason of not-working, whereas, married women have a higher probability of being in housekeeping. For women, owning a house lowers the probability of being ill or a student, but increases the probability of housekeeping and other reasons of not-working. On the other hand, for men the probability is lower for being in any of the inactivity states. More working people in the household decreases the likelihood for both the genders of being in any not-working states. As household income increases for both genders, the likelihood of being in housekeeping or a student falls. Men who have more dependents in the house have a higher probability of being ill, student housekeeping and other reason. However, the situation is opposite for women with the exception of being ill. Living in a joint family or residing in urban areas, have a higher probability for both men and women to be in all states of not-working relative to working.

During the sample period, the labour force participation has shown declining probabilities as indicated by negative marginal effects of dummies for 2007 and 2009. This may be due to the adverse situation of macroeconomic fundamentals that can be presumed as the consequence of backward linkages of labour market. In the presence of backward linkages, the spillovers of reduced economic activity have resulted in a decrease in employment opportunities for skilled and unskilled labourers.