Economic Liberalization, Competitiveness and Women’s Employment

Abstract This paper investigates the relation between female labor force participation rates and wage competitiveness in the MENA region. We offer a new explanation for MENA?s low female labor force participation rates based on the variation in average non-agricultural wages in different countries in the process of transition from agrarian to modern industrial structures. The hypothesis is tested using a sample of 51 developing countries at different stages of development. We also examine the implications of low female labor force participation rates in non-agricultural activities for wage competitiveness and successful adjustment in the MENA countries. It is argued that during the oil era the economies in the MENA region locked themselves into family structures and female socio-economic roles which are not compatible with current economic realities. The central hypothesis of the paper is that, given the rates of labor productivity in the region, combined with the role of women within the patriarchal social and family structures, there may not exist a real wage which could restore competitiveness while at the same time maintaining the traditional role of women in the economy. It is concluded that the socio-economic role of women may be an important missing link in the puzzle of economic adjustment in the MENA region in the post oil era.