Understanding low female labour force participation: Policy evaluation using microsimulation

We project medium to long term trends in labour force participation and employment for selected low-participation EU countries (Italy, Spain, Ireland, Hungary and Greece), with Sweden as a benchmark, by means of a dynamic microsimulation model. By exploring alternative scenarios to our baseline forecasts and their implications for GDP growth, we find that the gap between male and female participation is mostly explained by (i) differences in the individual conditional behaviour of older female cohorts, (ii) inadequate family policies. In particular, our results show that the conditional behaviour of younger women in the low-participation countries is similar to that in Sweden. In a nutshell, what is needed is not a change of behaviour on the side of women but a change of mentality on the side of institutions and firms.