Chapter

Chapter 8A. Gulf Cooperation Council

Editor(s):
Kalpana Kochhar, Sonali Jain-Chandra, and Monique Newiak
Published Date:
February 2017
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Author(s)
Tobias Rasmussen

Across the world, female labor force participation has increased as women have become more educated and have had fewer children (Table 8.1). This change can be explained as the result in part of labor supply decisions, where women choose how to allocate their time based on an evaluation of the relative costs and benefits, as in Becker’s (1965) time allocation framework. In this framework, women choose between leisure, supplying labor to home production (such as child rearing), and supplying labor to the market and earning a wage (that is, being part of the labor force). The outcome will depend on the return to market labor, which will tend to increase with education levels, and the costs and quantity of home production, which will tend to decrease with fewer children.

Table 8.1.Global Female Labor Force Participation by Region, 1990–2014(Percent, ages 25–54, regional averages)
199020002014
Gulf Cooperation Council133.139.446.0
Organisation for Economic Co-operation and Development67.271.977.6
Africa62.066.069.6
Americas56.662.969.3
Asia and the Pacific59.762.765.4
Europe and Central Asia71.373.476.7
Source: International Labour Organisation, KILM database.

Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates.

Observed drivers of female labor force participation in other countries are also at play in the Gulf Cooperation Council (GCC) member countries. Based on analysis of detailed data for Organisation for Economic Co-operation and Development (OECD) countries covering 1960–2008, Steinberg and Nakane (2012) estimate the impact on female labor force participation from a series of explanatory variables. Applying their coefficients to GCC data indicates that increased schooling and the declining number of children explain the bulk of the increase in female labor force participation in the GCC since 1990. The fit of the model is generally fairly good, with comparatively small unexplained residuals for most GCC countries. For Saudi Arabia, however, the actual increase in female labor force participation has been considerably smaller than predicted.

The model also explains some—but not all—of the difference between female labor force participation rates in the GCC countries and the OECD mean (Table 8.2). This gap currently ranges from 19 percentage points in Qatar to 53 percentage points in Saudi Arabia. The part of the gap that is explained by differences in schooling and the number of children per woman ranges from 14 percentage points in the United Arab Emirates to 24 percent in Saudi Arabia (Figure 8.1). In all countries, however, there remains an unexplained residual, which indicates that there are additional factors, such as different cultural norms, that stand behind the GCC’s low female labor force participation rates and that these factors have remained relevant over time.

Table 8.2.Select Labor Market Indicators, 1990–2014(Percent, unless otherwise indicated)
199020002014
Labor Force Participation, Females Ages 25–54
Gulf Cooperation Council (GCC)33.139.446.0
Organisation for Economic Co-operation and Development (OECD)67.271.977.6
Years of Schooling, Females Ages 25+
GCC5.26.88.6
OECD8.69.811.0
Number of Children per Woman
GCC1.631.290.88
OECD0.670.590.53
Sources: International Labour Organisation, KILM database; and UN Human Development Report database.Notes: Averages across country groupings. Number of children per woman is the ratio of children ages 0–14 to females ages 15–64.

Figure 8.1.Explained Differences in Gulf Cooperation Council Female Labor Participation Rates, 2014

(Percent)

Sources: International Labour Organisation, KILM database; UN Human Development Report database; and IMF staff estimates.

References

A version of this analysis was previously published as Rasmussen 2013.

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