Foreign Direct Investments and gender labour force participation: An empirical study on Sub-Saharan Africa between 1990-2009

Abstract: This paper assesses how Foreign Direct Investment (FDI) impacts female labour force participation in Sub Saharan Africa (SSA). To deepen our research we additionally consider whether FDI lead to a decrease in the gender gap in employment participation in the region. The motivation of this research is that SSA governments have been implementing policies to attract FDI in their economies while little is known on the effects FDI have on gender related labour market outcomes. This paper contributes to the general literature gap on the effects FDI has on gender dimensions of host economies. This analysis is performed by means of OLS regressions with fixed effects using data from 43 SSA countries over the 1990-2009 period. Regressions use first Female Labour Force participation and later the ratio of Female to Male labour force participation as the dependent variable. The latter evaluate impacts of FDI on gender employment participation gaps. We find that FDI flows that entered SSA over the last couple of decades did not generate significant improvements in FLFP, exception made for countries with initially low FLFP rates. When differentiating our countries according to mineral endowments we found a positive effect of FDI on FLFP that was only significant in mineral rich countries. Significant reductions in gender employment participation gaps weren’t observed in any of our regressions.