Economic growth, gender inequality, openness of trade, and female labour force participation: a nonlinear ARDL approach

This study examines the dynamic association between economic growth, gender inequality, trade openness, and labour force participation in Malaysia over a 40-year timeframe from 1980 to 2019. The results of the autoregressive distributed lag revealed that trade openness and female labour force participation have considerable and significant effects on economic growth. The nonlinear autoregressive distributed lag-bound test results also revealed an uneven long-term relationship between female labour force participation and economic growth. The positive and negative shocks of increased labour force participation have varying effects on Malaysia's economic growth. The Granger causality results revealed the existence of a bidirectional causal association between male and female labour force participation and a unidirectional association between economic growth and male labour force participation, trade openness and male labour force participation, as well as the gender parity index and female labour force participation. These findings suggest that more female labour force participation, a better gender parity index, and greater trade openness contribute to rapid economic growth. The findings encourage policymakers to improve institutional quality for better economic efficiency and female labour force participation in a bid to enhance overall development in Malaysia.