|Saudi Arabia|-0.645***|**-0.153**|1.501**|0.848|
|---|---|---|---|---|
|Tunisia|0.174|0.008|0.676|0.469**|
|Yemen|-0.429**|-0.007|-0.167|0.180|

Source: ILO-EAPEP database (Female LFP) and World Bank, World Development Indicators for other indicators. Significance level: ***=.01; **= .05; *=.1 - *; Standard errors, lags and constants omitted. In bold, coefficient changing significance or sign in the Granger model.

# **Conclusions**

The paper addressed the question of whether the U-shape hypothesis holds for MENA countries and for the period 1990-2010. Nonparametric estimates confirmed previous results that the U-shape hypothesis holds worldwide and cross-country and that the MENA region could fit the trend. The fundamental pillars of the hypothesis including the share of agriculture in value added, female education and fertility rates are all consistent with the hypothesis to an extent that the MENA region outperforms other regions of the world. And the MENA countries seemed to have turned the corner (saddle point) in terms of FPRs in four different respects: 1) <u>Visually (Figure 1); 2) Economically, by having passed the GDP per capita</u> threshold and restructured away from agriculture 3) Statistically, by having experienced increases in FPRs and GDP per capita between 1990 and 2010; and 4) <u>Socially</u> by having increased female secondary education and reduced fertility rates.

There are, however, two aspects that make the MENA region stand out as compared to other regions. The first is that women in the MENA region seem to exit the labor force around the age of 25, which largely coincides with the average marriage age in the region. This makes the FPR curve by cohorts downward sloped rather than hump shaped. The second aspect is that the MENA region is the only region that was not able to expand the share of both services and manufacturing as opposed to other sectors that are less likely to employ women. These are both important leads to understand why the MENA region lags behind in terms of FPRs despite the fundamentals of the U-shape hypothesis.

The parametric estimations confirm the cross-country U-shape hypothesis illustrated nonparametrically in Figure 1 but provide a more complex picture if we disaggregate results by region and age cohort. Some regions and cohort show non-significance or even an inverted U-shape. In particular, once we combine the longitudinal information and take endogeneity into account the simple quadratic U shape observed in in Figure 1 for the MENA countries disappears and is actually reversed. There is wide heterogeneity across MENA countries and it was not possible to establish a law that regulates the relation between FPRs and GDP over the period considered.

The paper also found that the fundamentals of the U-shape hypothesis are not constraining the expansion of FPRs in the MENA region. The region has outperformed other world regions in terms of reduction of the agricultural share of output, female secondary education and fertility rates. All countries have also significantly expanded in terms of GDP per capita between 1990 and 2010 and they are now well beyond the 2,000-3,000 USD per capita threshold that is considered by the literature the turning point between declining and increasing FPRs. When considering the share of agricultural output, fertility rates, manufacturing or services value added into the FLPs equations, results are largely as expected.

We have therefore to conclude that explanations for the lack of support for the U-shape hypothesis in MENA countries should be sought among two sets of factors. The first is economic and related to the lack 19