The Influence of Female Labor Force Participation on Economic Growth in Palestine: An ARDL Approach

Abstract

This paper investigates the impact of female labor force participation (FLFP) on economic growth in Palestine, measured through the natural logarithm of gross domestic product (GDP). Despite ongoing efforts to promote gender equality, FLFP in Palestine remains markedly low, representing a missed opportunity for economic growth and development. This study utilizes an autoregressive distributed lag (ARDL) model and an unrestricted error correction model (UECM) to analyze data from 2000 to 2022, sourced from the World Bank. The primary objectives include assessing the short-run and long-run effects of FLFP on economic growth and evaluating the speed of adjustment to changes in the participation of the female labor force. The ARDL model identifies significant positive impacts of the FLFP rate on GDP in the short and long term. The bounds test indicates a long-run equilibrium relationship between the FLFP rate and the GDP, and the UECM results corroborate these findings, highlighting a significant speed of adjustment towards the long-run equilibrium. The results suggest that increasing FLFP can substantially boost economic growth in Palestine, leading to significant long-term economic benefits. These findings underscore the importance of targeted policies to reduce barriers to female employment and promote Islamic equality (musawah) and nondiscrimination in the labor market. Such policies could include improving access to vocational training, implementing supportive legal frameworks, and addressing substantive and transformative equality to empower women's economic activities. This paper contributes to the existing literature by providing robust empirical evidence of the critical role of FLFP in driving economic growth in Palestine. The study's findings support formulating policies that enhance FLFP, leading to significant long-term economic benefits and a hopeful future for Palestine's economy. Future research should explore the impact of specific interventions and comparative studies across similar socio-economic contexts to deepen understanding of these dynamics.