The Effect of Working outside the Home on Women’s Empowerment in Nigeria

Maret Rakotondrazaka, Fenohasina (2016). 'The Effect of Working outside the Home on Women’s Empowerment in Nigeria' Paper presented at the annual conference of the HDCA, Tokyo 2016.

We provide evidence of a positive causal effect of female labor force participation outside the home on women’s empowerment in Nigeria through three different estimation strategies. The instrumental variable approach that tackled the endogeneity bias used indicators of variations of labor demand with number of banks per capita by state and its interaction with ethnicity and religion dummies to identify women’s female labor supply. The results showed that working outside of the home for women in Nigeria increase their probability of autonomy in making decisions inside the household by about 60 percentage points on average but the magnitude depends on what decision is to be made. For example, working outside the home increases the probability of women’s autonomy in making decision alone or with husband on daily purchases by 86 percentage points while it is only 48 and 42 percentage point respectively regarding decision on large purchases and husband’s money. Additionally, we use the approach developed by Conley et al (2008) where the exclusion restrictions on the instruments are relaxed to not be exactly exogenous so that the statistical relationship between the instruments and the outcome of interest is only close to zero. We also run the CUE-GMM, GMM estimation and the tests for weak IV robust inference in binary choice models with heteroskedasticity developed by Magnusson (2008) and Finlay and Magnusson (2009). Finally, we run bivariate probit estimation. They all confirm the main results.

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