Enhance or depress? The effect of trade on active females in the labour market

The objective of this study is to provide evidence for the existence of threshold effects in trade openness, which affects the female labour force participation rate (FLFPR) in Asian countries. The authors employ the proportion of export, import and total trade volume to gross domestic product to denote export and import dependency and trade openness, respectively. The panel threshold regression results indicate that there exists an optimal value in the correlation between trade openness and FLFPR below which an increase in trade openness will enhance the FLFPR; an adverse relationship exists when trade openness exceeds the threshold value. This relationship is attributed to the trade-off between the cost reduction effect and the technology channel. Furthermore, the authors further categorise trade openness into export and import dependency. The findings reveal that export dependency also has a single threshold effect on FLFPR, while import dependency exerts a negative effect on FLFPR regardless of threshold effect. Therefore, the government could promote female participation in the labour force by regulating the export policy.