Does Fiscal Decentralization Improve Gender Parity in Employment? Evidence from Pakistan

Abstract

It is emphasized by several studies that a successful fiscal decentralization increases the participation of citizens in economic activities and local development. A large number of studies has explored that the fiscal decentralization has positive effect on employment generation in a number of studies. But none of the study has examined that how fiscal decentralization has affected gender equality in employment in Pakistan. This study empirically investigated the dynamic relationship between fiscal decentralization and gender equality in employment by employing different measures of fiscal decentralization and autoregressive distributed lag model (ARDL) bounds test approach for integration testing for the period of 1975 to 2020.  The bounds tests suggest that the variables of interest are bound together in the long run when gender equality in employment is dependent variable. The associated equilibrium correction is also significant, confirming the existence of a long-run relationship. The robust analysis of this study suggest that fiscal decentralization is a successful tool to promote the equality in employment activities in Pakistan. It can be concluded that fiscally decentralized economy has greater ability to promote these activities then the unitary governments.