metadata: authors: 0: author: Mohieldin,Mahmoud
1: author: Ramadan,Racha
count: Middle East and North Africa
docna: 0: docna: Could Digital Inclusion Close the Gender
            Economic Gap in the MENA Region ?
docty: Policy Research Working Paper
abstracts: cdata!: Closing the gender digital divide by
            ensuring equal access to and benefit of the internet may
            reduce economic inequalities and close the gender gap in
            employment by providing new economic opportunities and
            facilitating access to market information. This paper
            estimates the impact of digital inclusion, measured by the
            Inclusive Internet Index on the female-to-male labor force
            participation ratio, while controlling for other economic
            and social factors. Using data from the World Development
            Indicators, the Economist Intelligence Unit database, and
            the World Bank&#x2019;s Women, Business and the Law
            database for 13 countries in the Middle East and North
            Africa region for four years (2018 to 2021), a pooled cross
            section dataset is constructed. The model is estimated using
            generalized least squares to control for heteroskedasticity.
            The results show that an inclusive internet environment
            would reduce the gender gap in the labor force. Other key
            drivers include the structure of the economic growth, norms,
            and gender roles in the society. These results are relevant
            for the United Nations Sustainable Development Goals agenda,
            mainly goals 5 and 10.
display_title: Could Digital Inclusion Close the
            Gender Economic Gap in the MENA Region ?
listing_relative_url: /research/2024/01/34235628/digital-inclusion-close-gender-economic-gap-mena-region
topicv3: Access and Connectivity m1326192 2329,Gender and Economic Empowerment m1327622 911,Female Labor Market m1504222 2950
publishtoextweb_dt: 2024-01-10T00:00:00Z
dois: 10.1596/1813-9450-10663
origu: Off of Sr VP Dev Econ/Chief Econ (DECVP)
no_of_pages: 18
author_keys: 0: author_key: 435192
1: author_key: NA
model_extractions: Policy Research Working Paper 10663 Could Digital Inclusion Close the Gender Economic Gap in the MENA Region?

_Mahmoud Mohieldin Racha Ramadan_ Middle East and North Africa Region Office of the Chief Economist January 2024
Policy Research Working Paper 10663

# **Abstract**

Closing the gender digital divide by ensuring equal access to and benefit of the internet may reduce economic inequalities and close the gender gap in employment by providing new economic opportunities and facilitating access to market information. This paper estimates the impact of digital inclusion, measured by the Inclusive Internet Index on the female-to-male labor force participation ratio, while controlling for other economic and social factors. Using data from the World Development Indicators, the Economist Intelligence Unit database, and the World Bank’s Women, Business and the Law database for 13 countries in the Middle East and North Africa region for four years (2018 to 2021), a pooled cross section dataset is constructed. The model is estimated using generalized least squares to control for heteroskedasticity. The results show that an inclusive internet environment would reduce the gender gap in the labor force. Other key drivers include the structure of the economic growth, norms, and gender roles in the society. These results are relevant for the United Nations Sustainable Development Goals agenda, mainly goals 5 and 10.

This paper is a product of the Office of the Chief Economist, Middle East and North Africa Region. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://www.worldbank.org/prwp. The authors may be contacted at racha.ramadan@feps.edu.eg.

_The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent._ Produced by the Research Support Team
**Could Digital Inclusion Close the Gender Economic Gap in the MENA Region?**<sup>**1**</sup>

Mahmoud Mohieldin<sup>2</sup> – Racha Ramadan<sup>3</sup>

**Keywords:** Access and Connectivity, digital divide, Female Labor Market, Gender and Economic Empowerment, MENA countries.

**JEL classification:** D63, O10, O33

> 1 This work was supported by the MEN Chief Economist Office under the labor and gender research programs (TTLs: Nelly Elmallakh and Nazmul Chaudhury)

This paper is a product of the Office of the Chief Economist, Middle East and North Africa region. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://www.worldbank.org/prwp. The author(s) may be contacted at racha.ramadan@feps.edu.eg.

2 Professor at Faculty of Economics and Political Science-–Cairo University. IMF Executive Director and the United Nation’s Special Envoy on Financing the 2030 Agenda for Sustainable Development. Email: <u>Mahmoud.mohieldin@feps.edu.eg. Google Scholar page: Mahmoud Mohieldin</u> 3 Professor at Faculty of Economics and Political Science– Cairo University. Director of the National Office of the Agence Universitaire de la Francophonie (AUF) in Egypt. Email: <u>Racha.ramadan@feps.edu.eg. Google</u> Scholar page: Racha Ramadan
# **Introduction**

The Middle East and North Africa (MENA) region has the second largest gender economic gap, after South Asia, with an average population-weighted score of 63.4%. The regional average score on the Economic Participation and Opportunity sub-index is 46% in spite of an educational attainment score of 99.5% (Global Gender Gap Report, 2022). Female labor force participation (FLFP) is the lowest worldwide with a rate of 19.6% in 2021 (World Development Indicators, 2022).

The gender economic gap is driven by several factors, including individual and household socioeconomic characteristics, the structure of economic growth, educational attainment, trade openness, and population growth (Assaad et al, 2014; Rodgers and Zveglich, 2012; ElborghWoytek et al, 2013; Nazier and Ramadan, 2017; Bursztyn et al, 2018; Efobi et al, 2018; Assaad et al, 2018; Osundina, 2019; Kooli and Al Muftah, 2020). Informal institutions such as social norms, traditional gender roles, motherhood, and work–family responsibilities may explain the gender gap in labor market outcomes, especially in conservative societies such as the MENA region (Kleven et al, 2019; Nazier and Ramadan, 2020; Patricia and Cortés, 2020). Additionally, formal institutions promoting more equal gender roles and redistributing child responsibilities equally between fathers and mothers are significant determinants of FLFP (Patricia and Cortés, 2020).

Another key driver of FLFP is digital inclusion that ensures equal access to, use, and benefit of information and communication technology (ICT). As the World Bank (2021) has highlighted, universal adoption of digital technologies would double FLFP by 20 percentage points over a 30-year period. Digital technologies would provide women information and knowledge, economic opportunities, and flexible arrangements. Such arrangements may be more compatible with the family-work responsibilities in conservative societies where women are the main caregivers and their mobility is limited (Chen, 2004; Antonio and Tuffley, 2014; World Bank, 2016; Bertrand, 2018; Kusumawardhani et al 2023). The literature shows that increasing access to ICT reduces the gender gap in employment by creating new economic opportunities, improving labor matching, and reducing transaction costs and entry barriers. The industries where job growth is expected in the fourth industrial revolution require science, technology, engineering, and math (STEM) education and digital skills (Badran, 2019). The digitalization of business procedures and payments has the potential to reduce the gender gap in business ownership by increasing women’s access to markets, productive assets, credits, and information (Chen, 2004; Antonio and Tuffley, 2014; World Development Report, 2016; Klapper et al, 2016; OECD, 2018; Viollaz and Winkler, 2020).

The need for flexible arrangements through the use of ICT increased with the spread of the novel coronavirus. The COVID-19 pandemic shed light on the importance of technology and accelerated the use of technology-based solutions worldwide. Limited mobility, working remotely, and e-learning made digital devices and internet access necessary to accessing economic opportunities.

Nevertheless, digital access is not universal, and the gender digital gap is wide, particularly in the MENA region. Ten countries in the region have internet penetration less than 70% 2
(UNICEF, 2021). Women in the region may be left behind as they are marginalized in the technology-based economy. In all countries of the region, male internet users are higher than female users. In countries such as the Arab Republic of Egypt, Tunisia, and the Republic of Yemen, more than 60% of men use the internet but less than 50% of women do (International Telecommunication Union, 2019; Arab Barometer, Wave V, 2018-2019). This gender digital divide hinders women’s access to information, services, and economic opportunities (Elnaggar, 2007; Ben Moussa and Seraphim, 2017).

Drivers of the gender digital divide may include the cost of ICT, women’s lack of the skills necessary to use it, irrelevance to the tasks and roles society expects them to complete, lack of access, social norms and stereotypes, and safety and security concerns. Therefore, access to the internet is a necessary but not sufficient condition to ensure that women will benefit from internet availability, especially in developing countries. This paper is an attempt to investigate whether bridging the digital divide through an inclusive internet environment might reduce the gender gap in labor force participation in MENA countries. An inclusive internet environment considers the availability and affordability of internet and technology, relevance of internet content, trust and privacy in the internet, and inclusive policies (World Bank, 2016; Singh, 2017; The Mobile Gender Gap Report, 2018, the Economist Intelligence Unit, 2021).

The paper contributes to the extensive literature tackling the gender economic gap in the MENA region in two ways. First, unlike the existing literature, the paper considers the potential role of an inclusive internet environment, measured by the Inclusive Internet Index, in reducing the gender gap in the labor market. The advantage of this index is that it controls for the inclusiveness of the internet environment and not only access to the internet. As found by Valberg (2020), ICT, measured by internet users and mobile subscriptions, is not the “ _leapfrogging_ ” strategy for a more gender-equal labor market. Low education, technology literacy, control over the use of technology and sociocultural norms play a role in access to and use of the internet (World Development Report, 2016; OECD, 2018, The Mobile Gender Gap Report, 2018). To benefit from internet access, women must have the required skills to use ICTs and have confidence in the relevance, security, and privacy of internet content. This paper’s second contribution lies in controlling for formal and informal institutions that shape gender roles in societies and affect women’s family-work responsibilities along with economic factors. These social norms, laws, and regulations are key determinants of women’s economic empowerment and gender equality in developing countries as well as in the MENA region (Assaad et al, 2014; Nazier and Ramadan, 2017).

The paper is organized as follows: Section 1 reviews the literature on female labor force participation and access to technology. Section 2 presents the digital gender gap and the economic gender gap in the MENA region. Section 3 discusses the methodology and the data used. The estimated results are presented in section 4. Finally, section 5 draws conclusions and provides policy implications.

# **1. Literature Review**

Extensive research has addressed determinants of female labor force participation and the gender gap in the labor market. At the micro level, women’s age, education, and marital status 3
are key determinants of female labor force participation. Other determinants include households’ characteristics such as household’s size, number of children, husband’s characteristics, and parents’ characteristics. Moreover, the characteristics of the community where women live play a significant role in their decision to participate in the labor market. Such characteristics include the unemployment rate and educational attainment levels (Assaad et al, 2014; Mehrotra and Parita, 2017; Nazier and Ramadan, 2017; Assaad et al, 2018; Klasen et al, 2019).

At the macro level, economic and social factors affect female labor force participation (Osundina, 2019). A country’s GDP growth, fertility and population growth, unemployment rate, education level, trade openness, and financial inclusion drive FLFP. Other drivers include traditions, norms, and values that shape gender roles and formal institutions, such as laws and regulations that promote more equal gender roles and redistribute child responsibilities between fathers and mothers (Rodgers and Zveglich, 2012; Elborgh-Woytek et al, 2013; IMF, 2013; Bursztyn et al, 2018; Efobi et al, 2018; Kooli and Al Muftah, 2020; Kleven et al, 2019; Assaad et al, 2020; Nazier and Ramadan, 2020; Patricia and Cortés, 2020).

Furthermore, the gender digital divide is tied to women’s inability to participate in economic activities (Antonio and Tuffley, 2014; Viollaz and Winkler, 2020). In four Mediterranean countries (Algeria, Morocco, France, and Spain), Kerras et al. (2020) found that the digital gender divide has a negative significant impact not only on the fifth UN Sustainable Development Goal (SDG5) related to gender equality, but also on SDG2, SDG3, SDG4, SDG8, SDG9 and SDG10. Access to and use of the internet have a positive impact on labor market outcomes in general, and especially for women, by driving economic opportunities and facilitating access to knowledge and information. Access to affordable and relevant digital devices and information provides more flexible work arrangement and saves workers time and money (Dettling, 2013; Antonio and Tuffley, 2014; Ben Moussa and Seraphim, 2017; Valberg, 2020; Viollaz and Winkler, 2020; The Economist Intelligence Unit, 2021b). Such flexible arrangements may be more needed in developing countries, such as those in the MENA region, where women are the main caregivers (Chen, 2004; Antonio and Tuffley, 2014; World Bank, 2016).

In spite of a range of evidence suggesting the impact of digital divide on gender equality and women’s economic empowerment in developing countries, empirical literature on the question is scarce, particularly in the MENA region. A study in rural areas of South Africa showed that full coverage by a mobile phone network leads to a 15-percentage point increase in employment and that women accounted for most of the change, although most of the women entering the workforce were without significant childcare obligations (Kloner and Nolen, 2010). A study of the implications of ICT diffusion in the United Arab Emirates on women’s empowerment showed it promoted access to education and job market opportunities and other resources (Ben Moussa and Seraphim, 2017). Similarly, a study using the Jordanian Labor Market Panel Survey found that female labor force participation increases with internet adoption, mainly among older skilled women, a result researchers attributed to their access to online job search (Viollaz and Winkler, 2020).

4
Cross country studies show that ICT production and usage increase women’s access to economic opportunities by increasing access to information, reducing transaction costs, providing flexible arrangements, and overcoming distance barriers, especially in conservative cultures where women face mobility restrictions. A study using panel data on 209 countries for the years 1960 through 2002 found that an increase in ICT infrastructure and the use of ICT would reduce the gender gap in education and employment (Chen, 2004). The results confirm the positive role played by ICT in improving gender quality in employment, which in turn enhances economic development. A study in Africa used a panel of 48 countries for the period 1990 to 2014 (Efobi et al., 2018). It found that increasing mobile phone penetration, internet penetration, and fixed broadband penetration increased women’s participation in the labor market, while controlling for other factors such as economic level, openness, and democracy level of the economy. Similarly, Valberg (2020) found that ICT, measured by internet users (per 100 inhabitants) and mobile subscriptions (per 100 inhabitants), has a positive effect on female labor force participation using panel data for 156 developed and developing countries from 1991 to 2014. However, this positive effect differs with the country’s economic level. The results show that ICT is not the “ _leapfrogging_ ” strategy for a more gender-equal labor market in developing countries.

Research to date has always looked at access to the internet and its impact on the gender gap in the labor market. However, access to the internet is a necessary but not sufficient condition to ensure that women benefit, as they must consider using the internet to be safe and relevant to their lives and to have the skills and resources—such as a device with which to access it— to use it. An inclusive internet environment is one that offers availability, affordability, security, relevance, and inclusive policies (The Economist Intelligence Unit, 2020b).

This paper aims to fill the gap in the existing literature in two ways. First, it tests the hypothesis that an inclusive internet environment might reduce the gender gap in labor force participation. Second, in addition to economic factors, the paper controls for formal and informal institutions that shape gender roles in society. Following Chen (2004) and Valberg (2020), the paper uses a cross-country approach to allow for comparability. It considers MENA countries because of the dire economic gender gap that exists in the region.

# **2. Economic Gender Gap and Digital Inclusion in MENA Region**

The gender economic gap measured by the ratio of female-to-male labor participation rate in the MENA region is considered the lowest worldwide and has been stagnant for years. In 2021, the FLFP rate in the MENA region varied between 21% of male labor force participation in the Islamic Republic of Iran to 60% in Qatar (Figure 1). Saudi Arabia is the only country that achieved progress between 2018 and 2021, where the female-to-male labor participation rate increased from 28% to 39%.

5
_Figure 1: Female to male labor force participation ratio_ <!-- Start of picture text --> 60<br>50<br>40<br>30<br>20<br>10<br>0<br><!-- End of picture text --> <!-- Start of picture text --> 60<br>50<br>40<br>30<br>20<br>10<br>0<br>2018 2019 2020 2021<br>Algeria Bahrain Egypt Iran Jordan<br>Kuwait Lebanon Morocco Oman Qatar<br>Saudi Arabia Tunisia UAE<br><!-- End of picture text --> <!-- Start of picture text --> Algeria<br>Kuwait<br>Saudi Arabia<br><!-- End of picture text --> <!-- Start of picture text --> Bahrain<br>Lebanon<br>Tunisia<br><!-- End of picture text --> <!-- Start of picture text --> Egypt<br>Morocco<br>UAE<br><!-- End of picture text --> Source: Constructed by the authors using World Development Indicators (2022) Around 57% of individuals in the MENA region had access to the internet in 2018. By 2020, this share soared to 76%, higher than the world value of 60%. However, much of the increase was among men. According to the index of the gender gap in internet access provided by the Economic Intelligence Unit (2022), men had higher internet access than women in nine countries of the thirteen included in the region in 2021 (Table 1).

Closing the gender gap in internet access might not be sufficient to ensure that women benefit from the internet in accessing information and economic opportunities. Nonetheless, evidence suggests that it is powerful. As figure 2 illustrates, countries in which the gender gap is in favor of men (where the gender gap in the internet access index has a high positive value), such as Egypt and Morocco, have low female-to-male labor force participation ratios, while the four countries characterized by equal internet access, indicated by a 0 value for the internet gap index, have the highest female-to-male labor force participation ratio. As figure 3 illustrates, inclusive access to the internet with relevant and secure content is associated with a lower gender gap in labor force participation (The Economist Intelligence Unit, 2021b). Countries with high scores on the Internet Inclusion Index (III), which assesses the enabling environment of adoption and beneficial use of the internet, have greater equality in labor force participation rates.

6
_Table 1: Internet access in favor of:_

||**2018**|**2019**|**2020**|**2021**|
|---|---|---|---|---|
|**Algeria**|male|male|male|male|
|**Bahrain**|male|female|female|female|
|**Egypt, Arab Rep. **|male|male|male|male|
|**Iran, Islamic Rep. **|female|male|equal|male|
|**Jordan**|male|male|female|male|
|**Kuwait**|equal|equal|male|male|
|**Lebanon**|male|male|male|male|
|**Morocco**|male|male|male|male|
|**Oman**|male|male|male|female|
|**Qatar**|male|male|male|male|
|**Saudi Arabia**|female|equal|equal|equal|
|**Tunisia**|male|male|male|male|
|**United Arab Emirates**|male|female|female|female|

Source: Constructed by the author using the gender gap access indicator of the Internet Inclusion Index constructed by the EIU.

_Note: The measure of gender gap in internet access is computed as (% male access - % female access / % male access). Positive values indicate that male access exceeds female access. A smaller or negative gap indicates greater female connectivity (The Economist Intelligence Unit, 2021a)._ _Figure 2: Gender Economic Gap and Gender Gap in internet access (2018-2021)_ Source: Constructed by the author using gender gap access indicator of the Internet Inclusion Index constructed by the EIU and female-to-male labor force ratio from the World Development Indicators.

7
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control for education, another key driver of female labor force participation, educational attainment measured by average years of schooling at the country level, is included in the model.

Formal and informal institutions affect the gender roles in society and women’s decision to enter the labor market, especially in the MENA region. Three variables from the World Bank Women, Business and the Law dataset are used to control for such institutions. Regarding legislations, known as formal institutions, two variables are included in the model. The first formal institution variable is the number of days of paid paternity leave. Giving men access to paid paternity leave may challenge the traditional roles, as it suggests men and women will share care work responsibilities. So, in countries where the legislation states more days of paid paternity leave, women’s participation in labor market is expected to increase. The second formal institution variable is captured in a dummy variable that equals one if the law prohibits discrimination in access to credit based on gender, 0 otherwise. The informal institution included in the model is women’s freedom of mobility as a measure of values and norms. This dummy variable equals one if a woman can travel outside her home in the same way as a man, 0 otherwise.

The data used is a pooled cross section dataset of 13 MENA countries for years from 2018, to 2021. The dataset is constructed from the World Development Indicators, the Economist Intelligence Unit database of the Inclusive Internet index and the World Bank Women, Business and the Law database. The constructed dataset is used to estimate equation 1 using the generalized least square (GLS) method to control for heteroskedasticity of error terms. The error terms are clustered at the country level.

Year dummies are included in the model to capture the effect of the years of the COVID-19 pandemic. Three dummy variables are included for the years 2019, 2020, and 2021.

Another version of the model is estimated using the gender gap in internet access<sup>4</sup> as an explanatory variable instead of the Internet Inclusion Index ( _Model 2_ ). A higher positive value of this gap means that male internet access exceeds female access. Model 2 is estimated using the GLS method. However, as internet users are not randomly assigned and as education, economic growth, and geography affect access to the internet, the gender digital divide is likely to be endogenous to labor market outcomes (Dettling, 2013; Gurumurthy and Shami, 2014). Thus, Model 2 is re-estimated using a two stages least square (2SLS) approach to control for endogeneity ( _Model 3_ ). The identification assumption is that the existence of national strategies that promote safety and trust encourages women to use the internet, resulting in a reduction in the gender digital gap. This reflects an understanding that safety and security concerns are barriers for women’s use of the internet.

> 4 The measure of the gender gap in internet access is computed as (% male access - % female access / % male access). Positive values indicate that male access exceeds female access. A smaller or negative gap indicates greater female connectivity.

9
Two instrumental variables (IV) are used. The first one is the trust score from the EIU database. This indicator considers how confident respondents are that their activity online is private. The score takes values from 0 to 100, where 100 is the most inclusive environment (The Economist Intelligence Unit, 2021a). The existence of such environment would encourage women and girls to access the internet, closing the gender gap in accessing internet with no direct effect on labor force participation. The second IV is the percentage of schools with internet access. This variable is used to control for internet availability. Increasing internet availability in an area would increase women’s access to the internet (Kusumawardhani et al, 2023).

# **4. Estimated Results**

The estimated coefficients of the different models are presented in Table 2. The first column represents the results of the GLS model ( _Model 1_ ) of the Internet Inclusion Index as the main independent variable. The Internet Inclusion Index has a positive significant impact on the gender gap in the labor force. This means that an inclusive internet environment is associated with higher ratio of female-to-male labor force participation.

Considering the gender gap in accessing the internet ( _Model 2_ ), the results show that when men have greater access to the internet than women (indicated by a higher positive value of the index of gender gap in access to internet), the female to male labor force participation ratio decreases. However, this negative effect is not significant in the GLS model. In the 2SLS model ( _Model 3_ ), in contrast, when instrumenting the gender gap in internet access with the trust score and the percentage of schools with internet access, this negative effect is significant. These results align with the proposition that, accessing the internet is a necessary but not sufficient condition for women to access economic opportunities. It worth noting that the results of the first stage of the 2SLS model<sup>5</sup> showed that the higher the trust score value and the percentage of schools with internet access, the lower the value of the gender gap in internet access reflecting women’s higher access compared to men. However, this negative effect is significant only for the percentage of schools with internet access.

Other key drivers of the female-to-male labor force participation ratio include the structure of economic growth. In Models 1 and 2, the higher the service share in GDP, the higher a country’s female labor force participation. This significant positive effect confirms that the services sector is one of the main employers for women in the MENA region. A similar positive significant effect is found for the industrial sector. These two variables became insignificant when the endogeneity of the gender gap in internet access is controlled for. Additionally, the higher the share of trade in GDP, the higher the ratio of female labor force participation to their male counterparts in all models.

With respect to education, the findings show that a high level of educational attainment would result in a decrease of the female-to-male labor force participation ratio. This negative effect is significant only for the first model. This unexpected result might confirm what is known in the literature as “The Education Paradox in the MENA region” (Assaad et al., 2018). The progress achieved in educational achievement in the MENA region, mainly for women, did not translate into an increase in female labor force participation.

> 5 See Annex 1 for the results of the first stage and the test of identification.

10
Regarding formal and informal institutions, the findings reveal that the length of paid paternal leave has no significant effect on the gender gap in labor force participation in any of the models. Even more surprising is the negative significant effect of the existence of a law that prohibits discrimination in access to credit based on gender. That is, countries that have laws prohibiting gender discrimination in accessing credit had a lower female-to-male labor force ratio compared to countries where this law does not exist. This surprising result requires more investigation. This negative effect is not significant when the digital divide is measured by the gender gap in internet access. However, the finding with respect to whether women can travel outside their homes in the same way as men is as expected: more women participate in the labor force in those countries, according to Models 1 and 2. Nonetheless, it appears that laws and regulations might not be a key factor in increasing FLFP as the norms and culture.

The result pertaining to the year dummies shows that in each of the years affected by the pandemic, 2019–2021, the female-to-male labor force ratio was lower compared to the ratio in the year 2018. This effect is significant for model 1. This negative significant effect may reflect the negative economic impact of the COVID-19 pandemic on women’s economic participation in the MENA region, which has been demonstrated in the literature (Ramadan, 2022).

11
_Table 2: Estimated Results of Different Models_

|Dependent Variable: Female-to-Male Labor<br>Force Participation Ratio|(1)|(2)|(3)|
|---|---|---|---|
|Method|GLS|GLS|2SLS|
|Main Independent Variable|Internet<br>Inclusive<br>Index|Gender Gap<br>in accessing<br>internet|Gender Gap<br>in accessing<br>internet|
|Inclusive Internet Index|0.781***|||
||(0.139)|||
|Gender Gap in Internet Access||-0.0176|-0.501*|
|||(0.0440)|(0.297)|
|Population Growth|0.243|-0.894**|-1.290|
||(0.467)|(0.423)|(1.325)|
|Educational Attainment (Years of||||
|education)|-2.049***|-2.026***|-4.044***|
||(0.299)|(0.379)|(1.032)|
|Gender Parity Index in||||
|<br>Tertiary Education||||
|Unemployment Rate (%)|-0.180|-0.0571|-0.735|
||(0.177)|(0.173)|(0.704)|
|Share of Industry Value Added in GDP (%)|0.624***|0.818***|0.240|
||(0.0798)|(0.0963)|(0.456)|
|Share of Service Value Added in GDP (%)|0.528***|0.566***|0.103|
||(0.0436)|(0.0672)|(0.338)|
|Share of Trade in GDP (%)|0.171***|0.192***|0.128**|
||(0.0151)|(0.0161)|(0.0497)|
|year=2019|-1.129*|0.382|-0.423|
||(0.647)|(0.675)|(3.596)|
|Year=2020|-3.739***|0.904|-2.214|
||(1.310)|(0.900)|(4.175)|
|Year=2021|-6.700***|-0.409|-3.534|
||(1.505)|(0.950)|(4.283)|
|Length of Paid Paternal Leave|-0.201|0.0465|-0.348|
||(0.133)|(0.116)|(0.383)|
|Women Can Travel Outside Their Homes in<br>the Same Way as Men|6.842***|4.350***|-0.588|
||(1.334)|(1.475)|(3.078)|
|Law that Prohibits Discrimination in Access<br>to Credit Based on Gender|-2.629**|-0.00311|2.348|
||(1.076)|(0.987)|(1.595)|
|Constant|-60.18***|-23.11**|60.69|
||(7.876)|(9.092)|(54.08)|
|Observations|42|48|42|
|R-squared|||0.750|
|chi2|6856|2215||

Standard errors in parentheses. *** p<0.01, ** p<0.05, * p<0.1 12
# **5. Conclusions and Policy Implications**

Limited access to and benefit from technology may hinder women’s access to economic opportunities, especially in conservative societies and in a context where e-learning and working from home became the new normal during the COVID-19 pandemic. Given how the pandemic accelerated reliance on and importance of technology and digital devices in terms of market access and income, these factors will only be more important in the future.

Within this context, the paper tests the hypothesis that digital inclusion and closing the gender digital divide would reduce the gender gap in labor force participation in the MENA region. Using a pooled cross section dataset of 13 MENA countries over four years (2018 to 2021), the female-to-male labor force participation ratio was regressed on an internet inclusion index. Another version of the model is estimated using the gender gap in access to the internet. Control variables include the structure of economic growth, population growth, openness of the economy, unemployment rate, educational attainment, formal and informal institutions, and years dummies.

The results show that digital inclusion would contribute to reducing the gender gap in labor force participation. It is worth noting that accessing the internet might not be sufficient to ensure women’s access to economic opportunities; affordability, relevance, and trust all play a role. Moreover, ensuring online privacy, encouraging girls to study STEM subjects, and providing women with the required digital skills are needed to increase women’s benefit from technology and thus female labor force participation. Other key drivers to close the gender gap include the economic growth structure and informal institutions. Equal gender roles in the society can reduce the economic gender gap.

The analysis has important implications for policies targeting women’s empowerment (SDG5) and aiming to reduce inequalities (SDG10). Ensuring women’s access to the internet is a necessary but not sufficient condition to transform the digital divide into a digital dividend and ensure that women benefit from being online. Bridging the digital divide requires ensuring the relevance of internet content, trust in internet privacy, and female e-inclusion policies. Moreover, closing the gender gap in labor force participation in the MENA region requires implementing policies and programs that address gender norms regarding girls’ and women’s mobility.

Finally, it is worth noting that the analysis has limitations that should be considered for future research. First, long panel data encompassing more countries and more than four years would allow researchers to consider factors that vary across countries in the region and across years. Second, digital solutions could help segments of women to better manage and balance familial obligations with paid work, based on the nature of work and economic activity. Besides, the extent of formal and informal employment in an economy affects interactions between the gender digital divide and the gender employment gap. Future research should consider how an inclusive internet environment would affect the different labor market outcomes in the MENA region.

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