DISCUSSION PAPER SERIES
IZA DP No. 13404
Gladys Lopez-Acevedo
Samuel Freije-Rodriguez
Mexico Alberto Vergara Bahena
Diego Cardozo Medeiros
Changes in Female Employment in Mexico:
Demographics, Economics, and Policies
JUNE 2020
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DISCUSSION PAPER SERIES
ISSN: 2365-9793
IZA DP No. 13404
Changes in Female Employment in Mexico:
Demographics, Economics, and Policies
JUNE 2020
Gladys Lopez-Acevedo
World Bank and IZA
Samuel Freije-Rodriguez
World Bank
Mexico Alberto Vergara Bahena
World Bank
Diego Cardozo Medeiros
Chicago Booth School of Business
ABSTRACT
IZA DP No. 13404 JUNE 2020
Changes in Female Employment in Mexico:
Demographics, Economics, and Policies
*
The unemployment and labor force participation gender gaps narrowed in Mexico after
the 2008 global economic crisis, when female labor force participation increased. This
paper aims to understand female labor force participation growth and identify its main
determinants. For that purpose, the paper estimates a probit model with data from the
National Employment Survey of 2007 and 2017, when the unemployment rate returned
to the pre-crisis level. Broadly, the results show that increasing labor force participation of
women ages 36 to 65 sustained the growth of overall female labor force participation,
women’s educational attainment can offset any individual or household obstacle to women’s
employability, and childcare availability significantly supports mothers’ employability.
JEL Classification: J21, J22, O54
Keywords: female labor force participation, Mexico, gender gap,
female education, childcare services
Corresponding author:
Gladys Lopez-Acevedo
World Bank
1818 H Street, NW
Washington, DC 20433
USA
E-mail: gacevedo@worldbank.org
* This paper is a product of the Poverty and Equity Global Practice of the World Bank Group. We thank Carlos
Rodriguez-Castelan, Gabriela Inchauste, Deeksha Kokas, Stuti Manchanda, and Matias Morales for their comments.
All remaining errors are the responsibility of the authors. The findings, interpretations, and conclusions expressed in
this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for
Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of
the World Bank or the governments they represent.
2
I. Introduction
The 2008 global financial crisis caused a severe 6.6 percent decrease in Mexico’s GDP in
2009, the sharpest decline of any Latin American country (Villareal, 2010). Unemployment
also increased significantly: after ranging around 3.6 percent since 2005, the unemployment
rate rapidly increased to 5.7 percent in the second quarter of 2008. Despite an immediate but
slight decrease in the following quarters, the unemployment rate took almost 10 years to
return to pre-crisis levels. Surprisingly, however, the gender gap—measured as the difference
between the male and female unemployment rates—closed to a 0.25 percentage point
difference after the crisis, from a 0.61 percentage point difference in 2007.
The labor participation gender gap also narrowed as female labor force participation (FLFP)
rates increased. Despite Mexico having a historically lower FLFP rate than Latin America
(World Bank, 2020), the gender gap shortened from 39.3 to 34.7 percentage points from
2005 to 2017. Considering that FLFP in Mexico has grown at a slower pace than the region’s
average and labor market conditions deteriorated after the crisis (Villareal, 2010), the closing
of the work gender gap after the economic downturn is puzzling, despite the economic
recovery that followed.
Gender labor gaps convey great economic and social opportunity losses for women, their
families, households, and countries in general (Ichauste G., Torres P. et Al., 2019). In
Mexico, if working-age women were to participate in the labor market in the same proportion
as male counterparts, the economic gain is estimated to be about 21-22 percent of GDP
(Cuberes and Teignier, 2016; Cuberes and Teigner, 2018). This tremendous proportion,
however, could have been even bigger decades ago.
3
Understanding the determinants of female employability in Mexico is important to advance
gender equality and women’s contribution to economic growth. Understanding what factors
support women’s labor market inclusion and how these change through time can point to
policies that help women benefit from economic growth (Klasen and Pieters, 2015) and avoid
economic crises from erasing gains.
This paper aims to explain the increase in female employment in Mexico and to identify the
main determinants underpinning women’s employability that allowed the narrowing of the
gender gap in unemployment and labor participation. We take two approaches: to understand
the demographic component, we decompose unemployment, gross employment, and labor
force participation rates in 2005 compared to 2017 by age group and gender. Subsequently,
we investigate the economic crisis and governmental policy implications on the probability
of a woman being employed by estimating a probit model that considers individual and
household characteristics, labor indicators as controls, and availability of childcare facilities
as an explanatory variable.
We use data from the National Employment and Occupation Survey (ENOE), Census, and
the National Childcare Facilities Directory for Working Mothers of the Social Development
Ministry (SEDESOL) to estimate explanatory coefficients for 2007 and how they changed
10 years later. The Childcare Facilities for Working Mothers program (CFWM) granted a
bimonthly cash transfer to mothers and children tutors without access to childcare facilities
granted by their labor benefits. Eligible mothers were expected to work or study. We chose
2007 as the year to begin our study because it coincides with the program’s first
