ISLAMABAD: Pakistani firms rarely encourage women to seek jobs, creating demand-side constraints for half the country’s population and leading to only 21pc of the country’s female labour force being actively employed, a study by the Asian Development Bank (ADB) has found.

The research is based on representative surveys of job seekers and employers in Lahore, administrative data from a job-matching platform and an incentivised resume-rating experiment and correlated with the Pakistan Labour Force Survey 2019.

The authors of the paper, titled ‘Barriers to Entry: Decomposing the Gender Gap in Job Search in Urban Pakistan’, noted that demand-side constraints are much more significant than supply-side factors at low education levels. But this demand-side gap in the quantity of job opportunities closes as education levels increase and jobs become more white-collar.

This explains why female labour force participation in Pakistan was 21pc in 2020 compared to a male labour force participation rate of 78pc. However, a quarter of women are not working but report they would like to work if they could find a suitable job, the report said.

Rising education levels help bridge demand-side gap for female workers, ADB study reveals

“These findings suggest that many women, particularly educated ones, are “latent workers” — pointing to key constraints on the labour demand side,” the study said.

Another key finding is that for less educated job seekers, firm gender criteria, an entirely demand-side constraint, are more binding for women than men and are also a larger constraint than supply-side decisions.

Women in this setting are 53pc less likely than men to satisfy the explicit gender requirements for any given vacancy. In fact, in the set of vacancies where individuals satisfied all basic criteria and were eligible to apply, women apply at a higher rate than men.

The third key finding is that the demand-side gap in the number of job opportunities substantially closes as education levels rise, while on the supply side, women become more selective. The gender gap in satisfying the gender criteria for a position shrinks by 70pc for the minority of women with secondary education and effectively disappears for the third of women with a tertiary education.

The paper observed that firms’ gender criteria and the educational requirements of the job suggest that vacancies with blue-collar characteristics such as manual labour and longer and late work hours are more likely to exclude women and more common among jobs with low education requirements, even conditional on industry and occupation fixed effects.

Additionally, firms’ gender criteria and the education level they seek to hire reflect existing infrastructure at the firm. For example, the firms that have restrooms or a separate prayer space for women are both more likely to be willing to hire women and more likely to be hiring at a high education level.

Calculations based on the Pakistan Labour Force Survey 2019 noted that Lahore, the country’s second-largest city with about 11 million people, has a male employment rate of 83pc compared to a female employment rate of just under 10pc. In contrast with the gender gap in employment, women and men had similar levels of educational attainment. About 71pc have at most primary education, 12pc have at most secondary education, and 15pc have tertiary education.

The paper emphasised that while supply-side decisions are important, alleviating demand-side constraints to female employment might have a larger impact.

The authors pointed out that demand-side barriers, namely explicit firm-imposed gender criteria, were quantitatively the largest barrier preventing a job seeker from meeting all the requirements mentioned in an advertisment before deciding to apply for the position.

Data showed that women and men had statistically indistinguishable probabilities of choosing the occupation of a given vacancy, which is a purely supply-side decision. Similarly, there was no statistically significant difference in the likelihood of meeting educational requirements for a given vacancy between women and men. “However, women are 20pc less likely to have met the experience requirements for the vacancy,” the research paper said.

Overall, women are 59pc less likely to be matched to a vacancy, meaning that they satisfy all the criteria and are shown the vacancy or are able to choose whether to apply, it said. Again, this gender gap closes as education levels rise.

Published in Dawn, December 18th, 2023