Policy Note / Güneş A. Aşık

"Low female labor force participation rate (FLPR) in Turkey has always been an important item on TEPAV’s agenda. Currently, the participation rate is 28.8 percent compared to the OECD average of 61.8 percent. Mexico has the second lowest FLPR among OECD countries, with 46 percent. Latest TURKSTAT data available reveals that as of October 2012, civilian non-institutional female population is 37.2 million. There are 17.9 million women at the working age while only 7.6 million women are employed.

This study investigates how a gradual increase in the FLPR until 2023 can boost Turkey’s GDP. Turkish government announced its official FLPR target for 2023 as 38 percent. In light of the analysis below, we identify what 38 percent FLPR can achieve in terms of GDP growth and depict why such an improvement in FLPR would be insufficient.

Evidently, increase in the FLPR has positive social influences beyond its impact on economic growth. This study neither undermines the sociological dimensions of the issue nor argues for a one-dimensional benefit analysis oriented exclusively on the economic aspects. Nevertheless, as an organization that concentrates on economic policy research, we are focusing on quantifiable impacts of changes in FLPR. The analysis is based on a simple partial equilibrium analysis which focuses directly on the FLPR-economic output relationship. In other words, we shut down the indirect effects coming through wages, education, fertility and other sociological and economic channels; and we solemnly focus on –ceteris paribus- the direct supply side effects of a gradual increase in FLPR."