Amazing developments in female labor market

It is well known that only a minority of women work in Turkey. There is a very low female labor force participation rate, currently only just above 30 percent. When the agricultural sector is excluded, the percentage of women in the labor force is even lower.
Unqualified middle aged women started working In urban areas, the female participation rate had hardly reached 26 percent by 2012. Although the rate is on an upward trend with increasing education levels, the gap that exists with Italy and Greece, the two countries that have the lowest female labor force participation rates in Europe, is still very high. They each have a rate of around 55 percent. In order to achieve its challenging economic development ambitions, Turkey needs to increase the number of working women more rapidly than in the past. Indeed, more working women means more breadwinners in the household and therefore more income and more spending on children's education, as well as more savings and, finally, higher growth rates. In this respect, there is rather good news. Bahçeşehir University's Center for Economic and Social Research (BETAM) published research this week that analyzes recent developments in the female labor market. From 2005 (the year the Turkish Statistics Institute [TurkStat] started to publish quarterly labor market data) to 2012, female employment and the female labor force in urban areas increased by 1,500,000 and by 1,700,000, respectively; an increase of more than 50 percent in both categories. The number of unemployed women increased by 200,000, but the rate of female unemployment decreased from 17 percent to 15.5 percent thanks to the strong increases in employment and the labor force. It should be noted that significant growth in the number of working women occurred in recent years. Indeed, 70 percent of the overall increase took place between 2008 and 2012. The female participation rate in urban areas rose from 18.7 to 20.8 percent between 2005 and 2008, at an average of 0.7 percentage points per year while the participation rate reached 26.1 percent in 2012 and the yearly average increase has been 1.3 points. If this observed acceleration in the female labor force and employment continues during the coming years, Turkey will be able to catch up to Greece and Italy with respect to the percentage of working women by 2030. Is this catch-up plausible? Answering this question needs a comprehensive analysis, but a close look at the figures may already provide some hints. BETAM's research shows that the largest share of the acceleration both in the increase of urban female employment and the labor force might be explained by the rise in middle-aged and less-educated housewives in the labor market. Almost half of an increase of 1,225,000 in urban female employment during the last four years is women having at least a college degree. This fact is not surprising, since the participation rate at the college level is quite high (70 percent) and the number of female college graduates is regularly increasing. It should be noted that from 2005 to 2012 no changes are observed in the participation rates of college graduates when considering age groups, except for women over the age of 44. This means that there are no exceptional entries into the labor market at this level of education and the increase in participation rates at later ages can be easily explained by delayed retirement (See BETAM's 2013 research brief “Artık daha geç emekli oluyoruz” [We are postponing retirement]). So, we can conclude that the increase in the female labor force and employment at the college level will be slightly faster in the future because of later retirement. The surprise lies among high school graduates, but mostly among women having an educational attainment level of less than high school. The participation rates of women aged between 25 and 54 with a high school diploma are increasing regularly. This means that each year, some housewives with a high school-level education decide to work. But the impact of this group on the exceptional increase in the number of working women is rather limited, since high school graduates constitute only 15 percent of female employment. On the other hand, less-educated middle-aged women started to enter the labor market in great numbers in recent years. The participation rate of this group increased by 4.3 percentage points, from 11.7 percent in 2008 to 16 percent in 2012, while the increase in the participation rate for women aged between 25 and 54 jumped by 7.7 points, from 13 percent to 20.3 percent. What pushed these housewives to work? We do not know the answer yet. When we have that answer we can predict if the rise in the number of working women will continue in the future.

‘Women hold up half the sky' -- Mao Zedong

When I decided to continue today with the issue of working women in Turkey, I remembered the famous slogan by the leader of the Chinese Revolution and decided to use it as the title. President Mao was trying in his historic speech given during China's resistance to Japanese occupation to fight the deep prejudices of conservative Chinese society regarding the place of women in economic, political and social life.
Turkey, for sure, is not in such a dramatic situation that China was facing in the 1940s, but it is also not too far from it. The female participation rate in the labor force in Turkey is the lowest in Europe at around 30 percent. The participation rate is about 50 percent in Greece, Spain and Italy, the countries with the lowest rates in Europe. There is no a single developed country in the world that has only a minority of its female population participating in economic activities. More women working in a household means greater income, increased savings, more disposable income for education and the health of children and finally, more rapid economic growth, without even talking about greater freedom for women. If Turkey, having reached the middle income group of countries in the last decade, wants to gain access to the club of developed countries, having much more women in the workforce is an absolute must. The good news is that our female labor force participation rate is on an increasing path. In my column on Tuesday (“Female employment, as well as unemployment, greatly increased”), I discussed the recent strong contribution by both the female labor force and female employment to the Turkish labor market. As the labor force had increased more than employment, this resulted in an increase in female unemployment. But I would like to remark that this is just a short-term occurrence. If one considers a longer period, one observes that female unemployment is decreasing despite the continuous growth of the female labor force, as was revealed by recent research by the Bahçeşehir University Center for Economic and Social Research (BETAM). This is the second piece of good news, for sure. According to BETAM's research (“Female participation in the labor force increases in cities,” Gökçe Uysal, Research Brief 13/143), the female participation rate increased from 17.8 percent to 24.9 percent from 2004 to 2011 while the female unemployment rate decreased from 17.9 percent to 16.6 percent. This decrease demonstrates an even stronger increase in the number of working women. One can remark that the improvement in female unemployment is rather limited, but let me also remark that it is quite consistent with the decrease of urban unemployment as a whole, which fell from 13.6 percent to 11.9 percent in the same period. The third good piece of news is the growing share of formal wage earners in the total urban female employment figures. Indeed, this share rose from 55.7 percent to 61.3 percent, while the proportion of informal female wage earners (workers who are not registered with the Social Security Institution [SGK]) declined from 23.6 percent to 18 percent. So, female employment is not only rising but is also rising in legitimate jobs. An interesting feature of the growth of the female labor force appears when this labor force is broken down according to educational levels. The urban female labor force increased by 40 percent as a whole within seven years, of which 47 percent was made up of women with an education of less than eight years. This fact is important because it shows that the attraction of working, for whatever reason, is just not limited to educated women. Until the cited BETAM research, it was well known that the improvement of female education is the main driver of the growth of women in economic activities. What's going on? To have some explanations we need to have more information about the decisions driving unskilled women to work. That said, let me finish with some insights from an econometric analysis done by BETAM. Consider a married woman with five years of education who lives in İstanbul. Let her be our benchmark. A similar woman with a higher level of education will be more likely to participate in the labor force, as expected. At the same time, another woman with exactly the same characteristics but who lives in the west will be more likely to participate, while another who lives in the east will be less likely to participate. These results reveal the role of cultural factors (conservatism versus modernism) regarding the attitudes of women vis-à-vis working. If we want to accelerate the increase in female employment, we must also address the cultural dimension of the issue.