Empowering Women, Transforming Economies: The Impact of Trade Liberalization and Labor Market Dynamics on Women’s Economic Empowerment in Asia

Abstract

This study examines the effect of liberalization on women's financial strengthening over 19 Asian nations from 1990 to 2020. Drawing upon Human Capital Theory, Gendered Institutions Theory, Segmented Labor Market Theory, and Inter-sectional Theory, the research explores how educational attainment, gender norms, labor market segmentation, and intersecting identities influence labor force participation of women. The analysis of Panel data, employing fixed effects models, examines the relationship between trade liberalization measures and key variables such as labor force participation rates, sectoral employment patterns, and wage differentials among young women aged 15-24. Empirical findings reveal significant negative associations between overall labor force participation of female and labor force participation rates of young women, moderated by increased employment in service sectors and higher amounts of female labor force participation. Cross-sectional dependence tests underscore strong interdependencies among variables, while panel unit root tests confirm the stationary of variables over time. Moreover, the Westerlund test indicates co-integration among the variables, suggesting long-term relationships. Policy recommendations include enhancing skills development programs, promoting gender-responsive labor policies, supporting access to finance for women entrepreneurs, strengthening social protection measures, and fostering female leadership in decision-making roles. These findings underscore the imperative of integrating gender-sensitive approaches into trade and labor policies to achieve sustainable and inclusive economic growth in Asia.