Women at Work: The Impact of Female Employment on Value Added in Mexico

We estimate the effect of a rise in female employment on municipal-level value added in Mexico. We combine economic census data with administrative records on the expansion of the Full-Time Schools Program (FTSP) to construct a shift-share instrument that links baseline female employment to predicted FTSP exposure between 2003 and 2018. Our estimates indicate that increasing female employment as a share of total employment increases the value added to gross output and fixed assets, as well as value added per worker, with no effect on wages, suggesting improvements in capital and labor efficiency. These effects are concentrated in municipalities with higher initial female employment rates, greater female educational attainment, and lower poverty levels. Such gains are driven primarily by increases in female employment in managerial and ownership roles. These results highlight the potential for increased female employment to enhance economic outcomes in contexts such as Mexico, where the female labor force participation rate remains stagnant.