The aim of this study is to project how much the gender inequalities in the labour force participation (LFP) in North Cyprus undermines per capita GDP of the north compared to South Cyprus through evaluating the contribution of the potential higher FLFP on per capita GDP, thus closing the gap between per capita GDP of two regions on the island.
This study is designed to calculate the effect of converged FLFP of north to south on per capita GDP of North Cyprus, which would in turn led the convergence of per capita GDP inequalities in north and south parts of the island.
On the contrary to the increase of FLFP in most of the developed and developing countries over the last few decades (WB, 2018), the LFP rate among Turkish Cypriot women in North Cyprus has remained the same over the years from 2004 to 2014 at approximately 40 percent and in the last two years started to decrease even there have been considerable improvements in the skills of women workers indicated by their high levels of education.
FLFP rate in 2011 was 50.7 percent in the EU and 57.5 percent in South Cyprus, while in North Cyprus it was 38.7 percent, which was far below the FLFP rates in both the EU and South Cyprus in the same year.
In addition, there is an "M-curve" of FLFP
over the life cycle.
Despite these achievements, female labor force participation (FLFP) rates are low and have remained at low levels for two decades.
Using cross-country regressions, however, Ross (2008) argues that it is oil and gas rents that lower FLFP rates.
It shows that the impact of oil and gas rents on FLFP increases when discriminatory labor laws are present.
This means that even if we control for the joint impact of rent and all common regional unobservable factors that could be correlated with Islamic family law, we still get a negative and statistically significant joint impact of rents and these laws on FLFP. In other words, we can identify the effect of Islamic family law free of any potential bias.
According to World Development Report (2012), globalization has increased relative FLFP and wage level.
Contrarily, Tejani and Milberg (2010) have found positive effects on relative FLFP in developing/middle-income nations while negative effects on relative FLFP in developed/high-income nations.
The main policy implication based on results is TO should be enhanced to increase relative FLFP in Pakistan.