Abstract
The International Monetary Fund (IMF) claims that its labour market reform facilitates the entry of women into the labour force and improves their employment prospects. Using an instrumental variable analysis in a sample of 109 countries between the years 1990 and 2014, this paper shows that IMF-sponsored labour market reforms lower female labour force participation, largely by lowering wages and thus diminishing incentives for women to work. Lower firing costs, conversely, support women’s entry into the labour force in the short term, with long-term implications being unclear. The paper has important implications for global efforts for gender equality.
