Increasing women’s labour force participation and career progression is a key priority for policymakers in developing and developed economies alike. A central question is whether economic development and rising incomes naturally lead to greater female labour market engagement. This column highlights that the answer depends critically on prevailing gender role attitudes. In societies with more traditional gender norms, positive economic shocks may actually reduce women’s labour force participation, particularly among married women. These findings have important implications for policymakers seeking to promote inclusive economic growth and advance gender equality.
Existing studies document a U-shaped relationship between economic development and female labour force participation (FLFP) (Boserup 1970, Goldin 1995). At early stages of development, participation often declines as women exit subsistence agriculture. The separation of market work and home production, along with stigma around women’s paid work, contributes to this decline (Dinkelman and Ngai 2022). As economies grow and undergo structural transformation, rising education levels and growing demand for service jobs tend to increase women’s market work hours (Ngai and Petrongolo 2017).
Yet, this U-shaped pattern is not universal and is often more muted in developing countries (Olivetti, 2014). Studies comparing countries with similar income levels reveal substantial variation in women’s employment, suggesting other forces are at play. Jayachandran (2015), for example, highlights the importance of cultural norms and social expectations – factors often overlooked in cross-country analyses.
In our recent paper (Huynh and Ku, 2025), we explore how economic growth interacts with gender role attitudes – male breadwinner model versus gender egalitarian values – to shape women’s labour supply, using Vietnam as a case study. With a female-to-male labour force participation ratio above 90%, Vietnam has outperformed many advanced economies such as Sweden, the US, the UK, and Germany in terms of gender parity in employment (Figure 1). However, this gap has been widening since the 2000s, a period marked by significant trade liberalization and rapid economic growth.
Figure 1 Female to male labour force participation rate across countries
Notes: Southeast Asia includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Timor-Leste, and Vietnam.
Source: International Labor Organization.
We show that this widening gender gap in employment, driven by a fall in female labour force participation, is not due to a lack of job opportunities. On the contrary, women benefit from increased employment opportunities in manufacturing and services, particularly in sectors fuelled by foreign direct investment. We argue that rising household incomes instead prompt a reversion to more traditional gender roles, especially in regions with less egalitarian gender role attitudes. In short, economic growth, when filtered through the lens of gender role attitudes, may have mixed implications for women’s labour market outcomes.
Positive export shocks and female employment in Vietnam
Following the US-Vietnam Bilateral Trade Agreement in 2002 and Vietnam’s accession to the WTO in 2007, the country experienced a surge in exports and foreign direct investment. To isolate the causal effects of this export-led growth on labour market outcomes, we employ a standard shift-share strategy commonly used in trade literature. Specifically, we predict a province’s export exposure based on its pre-2002 industrial structure and nationwide industry-specific export trends over time, and link this exposure to individual outcomes using data from the Vietnam Household Living Standards Surveys (2002–2018).
We find that export shocks facilitate positive structural transformation by shifting workers out of agriculture and into formal employment, echoing findings from McCaig and Pavcnik (2015, 2018). Female workers are particularly well-positioned to seize these new opportunities, moving more rapidly into manufacturing and service jobs. This trend aligns with the growth of foreign direct investment in labour-intensive sectors where women hold comparative advantages, such as textiles and electronics.
Intriguingly, at the extensive margin, these positive export shocks led to a significant decrease in women’s employment, while men’s employment remained largely unaffected. Provinces experiencing an export shock one standard deviation above the mean see a 2.7 percentage point drop in female labour force participation, widening the gender employment gap by over 50% relative to the baseline gap of 5.3 percentage points. At the same time, wage gains are similar for both men and women. While women who remain employed benefit, some women exit the labour force.
The income effect and male-breadwinner norms
Why are women leaving the workforce amid expanding economic opportunities? The answer appears to lie in the interplay between rising household incomes and traditional gender role attitudes. As household income increases, the financial necessity for dual earners diminishes, making the male-breadwinner model more salient.
Indeed, our data show that the decline in female labour force participation is entirely driven by married women in wealthier households whose husbands earn higher incomes. For these women, the income effect (which encourages home production) is likely to outweigh the substitution effect (which encourages market work) resulting from the export shock.
This finding resonates with evidence from other contexts. In India, Afridi et al. (2018) document an adverse effect of increasing education levels on women’s workforce participation. In the Vietnamese case, the shift is particularly surprising given the country’s long-standing commitment to gender equality under socialism.
North Vietnam (always socialist) versus South Vietnam (formerly capitalist)
To better understand how gender role attitudes influence women’s labour supply responses, we turn to Vietnam’s divided past. During the Vietnam War, the socialist North promoted gender equality and women’s participation in the workforce, while the capitalist South upheld more traditional gender norms. These ideological differences persist today. Decades after reunification, female labour force participation in the North remains close to 90%, comparable to that of men, whereas in the South it hovers around 80% (Figure 2). This divergence is mirrored in gender role attitudes: data from the World Values Survey show that people in the North hold more gender-egalitarian views (Figure 3). Notably, there is no comparable North-South difference in attitudes toward gender-neutral issues.
Figure 2 Labour force participation rate by gender and region in Vietnam, 2002-2018
Notes: This figure plots the share of individuals aged 20-64 who reported to have worked in the last 12 months.
Source: Vietnam Household Living Standards Survey 2002-2018.
Figure 3 Opinions of Southern Vietnamese compared to Northern Vietnamese
Notes: Coefficients come from separate regressions of each outcome (opinion) on the South indicator, controlling for year fixed effects, with confidence intervals at 95% level. Answers are recoded from “Strongly Agree”, “Agree” and “Neither” into 1 (Agree); “Disagree” and “Strongly Disagree” into 0 (Disagree).
Source: World Values Survey 2001, 2006 and 2019.
This divergence translates into different responses to economic shocks. In both regions, women reduce labour supply following export expansion, but the effect is substantially larger in the South. In the North, only women in the top household wealth quartile withdraw from work. In the South, women exit the labour force across the entire wealth distribution, suggesting a weaker attachment to the labour market, where the male breadwinner model re-emerges as soon as it is financially affordable.
To further test whether these differences reflect current regional conditions or deeper ideological legacies, we focus on migrants relocated under the post-war New Economic Zones (NEZ) program. Under this program, millions of people were moved across the country into remote, mountainous Southern provinces. Comparing North-born and South-born residents living in the same province today, we find that the labour supply behaviour of North-born women living in the South closely resembles that of women still in the North, despite living in the same geographic and institutional contexts as their South-born neighbours. This strongly supports the enduring influence of early-life exposure to socialist norms on women’s economic decisions.
Conclusion and policy implications
Vietnam’s celebrated economic growth has not translated into greater economic participation for its female population. Despite opportunities brought about by trade liberalisation and foreign investment, female labour force participation has been on a downward trajectory. This decline is not a narrative of trade-induced job loss, but rather rising household incomes intersecting with entrenched gender norms.
The North-South division in Vietnam illustrates how exposure to different politico-economic regimes continues to shape women’s labour market decisions. In the North, where socialist policies historically promoted equal participation in the workforce, women are more likely to remain employed. In contrast, in the South – where traditional male breadwinner norms are more deeply entrenched – women are more likely to withdraw from the labour force as household incomes rise. These patterns suggest that early exposure to more egalitarian norms can have lasting effects on women’s economic engagement, and that gender role attitudes are, in fact, malleable.
More broadly, these findings help explain why female labour force participation remains stubbornly low in many countries, despite gains in education and expanding labour market opportunities. For policymakers, this underscores that structural transformation alone is insufficient. To boost women’s participation in the workforce, complementary measures – such as public campaigns aimed at shifting gender norms – are essential. Without such interventions, economic development may inadvertently reinforce, rather than reduce, gender disparities in the labour market.
Source : VOXeu
