Analyzing the impact of financial sector growth on female empowerment: A focus on the United States of America

It is believed that institutional economics takes into account factors that are often neglected in neoclassical economics. Of these is the role of cultural expectations, societal norms and gender-related expectations. To test whether gender does play a significant role in impacting an individual’s well-being is our broad objective. On a more specific level, we want to test the effect of the presence and penetration of the financial industry, measured by deposit accounts and also represented by GDP growth in this paper, on female empowerment, measured by female labour workforce participation. We also use unemployment figures to check if it is affected in a similar fashion to our main dependent variable and if not, why there is a difference of impact between overall employment and that which is specific to the female gender only. We assume that active workforce participation represents an individual’s level of financial independence and consequently, one’s level of empowerment within the society. We use the Auto Regressive Distributive Lag(ARDL) technique to investigate an issue which is often studied based on a cross-country analysis rather than on a time-series scale. We also chose to make the United States of America our focus, as we would like to test if the impact on a developed country is similar to that of developing countries. Amongst our major findings are the lack of impact formal financial institutions seem to have on female participation in an economy, while we notice a significant level of correlation between unemployment, female participation and GDP.