One mechanism by which rent may reduce FLFP is through affecting female wages.
Another mechanism by which these rents affect FLFP is through direct transfers.
This paper, however, argues that, in addition to these, oil and gas rents may affect FLFP through another mechanism: by strengthening the discriminatory institutions inside the household wherever they exist.
Therefore, oil and gas rents should reduce FLFP more in countries that enforce Islamic family laws.
Using cross-country, within-country, and instrumental variable estimates, they demonstrated that the use of the plough, centuries ago, induced discriminatory attitudes today, and reduced FLFP, female firm ownership, and political participation.
The FLFP rate is the dependent variable and the interaction of rents and discrimination is included as one of the independent variables to identify the joint role of oil and gas rents and discriminatory institutions on FLFP.
kt], are respectively the FLFP rate, rents from oil and gas, and observed characteristics of the population in country k at time t.
In order to estimate these econometric models, one needs a longitudinal data set at the country level that has FLFP rates, a measure of oil and gas rents, country characteristics, represented by Z in Eqs.
One can control for this large variance in rents by taking the log of oil and gas rents, especially if the relationship between rents, its interaction, and FLFP is non-linear.
The FLFP rate, the dependent variable, is measured in percent.
Estimating the marginal effects, one finds that as rents rise (fall) by hundred per cent (that is, they double), in a fully Muslim country with Islamic family law, FLFP decreases (increases) by about 0.
When one uses the historical plough use instead of the Islamic family law index (the last two columns of Table 5), she finds no statistically significant difference in the impact of oil and gas rents on FLFP across countries with various degrees of historical plough use.