This project builds on a PEDL pilot grant awarded as part of the 2020 PEDL Young Scholars Matchmaking Workshop.
Eliminating gender distortions can improve aggregate productivity and welfare. In the context of Pakistan, where the average female labour force participation (FLFP) rate is 22.6 %, estimates suggest that advancing gender equality could potentially add as much as 30 billion USD to the country’s GDP. This project, thus, asks: what deters firms from hiring women? The researchers hypothesise that there are economic and non-economic integration costs in employing women. For instance, physical investment to a company facility to accommodate women is considered economic costs, and reputation costs of norm incompliance due to hiring women as non-economic ones. This project will provide evidence on 1) whether there are economic and non-economic costs in hiring women, 2) if relaxing the potential burden of bearing economic integration costs motivates firms to hire women, and 3) whether the willingness to comply with social norms can be monetarily incentivised.
This project will collect original firm-level survey data from 400 firms in Pakistan, and the data will be used to analyse what deters Pakistani firms from hiring women. The researchers’ survey instrument will have two major components. The first component contains questions about the basic characteristics of companies and their top managers. The second component is designed to quantify the economic and non-economic costs of hiring women, and to see if relaxing the potential burden of any of these costs can incentivise firms to employ women. To this end, the researchers will use i) a hypothetical-choice method to understand firms’ preference for hiring women if various economic costs are relaxed; and ii) a lab-in-the-field game to test if top managers can be incentivised to change their norm compliance.
This project has policy implications for countries interested in structural transformation and economic growth through increased female labour force participation. By understanding the extent to which the non-economic or social constraints to female hires bind, policymakers can better design and target policies and programs aimed at stimulating productivity and growth. This project also contributes to the literature on female labour force participation, which currently focuses on the effects of social norms on women's labour supply decisions, by examining the rarely investigated relationship between social norms and hiring decisions.
