Determinants of regional female labour market participation in the Netherlands

Abstract

The paper analyses the determinants of female labour participation. Structural equation modelling is used to handle theoretical concepts and to solve the typical problem of multicollinearity. The proposed methodology is applied to a dataset for the year 2002 made up of a sample of 278 municipalities in the Netherlands. The structural model and measurement model of the latent variables are estimated simultaneously by means of maximum likelihood. Model estimation and tests are performed using LISREL. Female participation is found to be positively influenced by the added-worker effect and negatively by the discouraged worker effect. The results show a negative impact of demographic pressure and a positive impact of socio-economic status and female-dominated sector structure.

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