Panel Data Analysis of the Effects of Female Labor Force Participation on Profit Rates

Abstract

Using a novel dataset, this brief note investigates the effect of female labor force participation (FLFP) on three important variables, profit shares, profit rates, and capital-output ratio, covering a very large set of countries (i.e., 130) over a recent time period of 1990-2019. This paper shows that while FLFP increases profit share in high-income countries, it reduces in middle-income countries. However, for both middle- and high-income countries, FLFP cannot prevent the overall tendency in profit rates to decline caused by a consistent decline in output-capital ratio.