Pakistan substantially lags behind with increasing female labour force participation (FLFP). Increasing the FLFP rate is a top development priority for the government but literature on understanding FLFP often focuses heavily on women's constraints rather than examining why firms do not hire women. This project focuses on the rarely investigated side of this issue and asks what deters firms from hiring women.
We hypothesise that there are both economic and non-economic integration costs attached to employing women in Pakistan’s cultural context. We consider costs to provide additional training and safe transport. Non-economic costs could be mental and reputational due to the norm incompliance of hiring women.
To answer this question, we collect firm survey data on economic and non-economic costs of hiring women using two methodologies. A hypothetical-choice methodology which asks firms their likelihood of hiring women under various hypothetical situations. This should reveal firms’ preferences to hire women if certain constraints are lifted. Secondly a lab-in-the-field game which asks respondents to choose between adhering to norms around male-female interactions, earning a lower prize and breaking away from norms to earn a higher price. This aims to measure the willingness to comply with social norms.
Our project will provide evidence on the following:
- Whether there are economic and non-economic costs of hiring women.
- If relaxing the potential burden of bearing economic integration costs motivates firms to hire women.
- Whether the willingness to comply with social norms can be monetarily incentivised.