Female Labour Force Participation and Unemployment in Northern Ireland: Religion and Family Effects

Econometric models of the incidence of economic activity and employment by religion for females in Northern Ireland are presented. Particular attention is paid to family effects. Censored bivariate probit models are estimated for single women and significant religion effects are found. In the case of married women, possible endogeneity and logical coherency problems are overcome by modelling the joint economic activity of females and their partners instead of attempting to condition on the male's economic activity. An indirect or family, rather than a direct, religion effect is found. This family effect occurs since, other things being equal, the wives of unemployed men are significantly less likely to be economically active. This may be the result of how the benefit system operates. I I N T R O D U C T I O N D ifferences in the economic activity of Catholic and Protestant men in Northern Ireland, particularly their unemployment rates, have pro­ voked a lively debate amongst academics and policy makers about the causal factors. 1 However as Davies et al. (1995) note, little or no attention has been paid to differences in the economic activity of Catholic and Protestant females. O n the one hand, Davies et al., suggest that there is an "underexamined consensus" that the differences in economic activity by religion are smaller for females than for males and so are less important. On the other Paper presented at the Ninth Annual Conference of the Irish Economic Association. 1 See Compton (1991); Eversley (1989); Gallagher (1991); Murphy and Armstrong (1994); and Smith and Chambers (1991) inter alia. hand, it is often claimed that Catholic women face a double disadvantage because of their sex and their religion. I n this paper a large household survey dataset, the Northern Ireland Labour Force Survey, is used to model the incidence of female economic activity by religion. Econometric models of the incidence of economic activity and employment are constructed. This fills a gap since no econometric modelling has been carried out before now. Particular attention is paid to religion and family effects — family size, family composition and, in the case of married women, their partner's economic activity. Modelling married women's economic activity is involved since there is a complex relationship between their activity and their partner's economic activity, which is likely to be endogenous. This problem and the separate logical coherency problem are overcome by modelling the joint economic activity of females and their partners rather than by attempting to condition on the male's economic activity. This approach is novel. Turning to religion, the basic issue is to what extent the observed differ­ ences in labour market outcomes — differences in the incidence of economic inactivity and unemployment etc. — reflect differences in labour market opportunities. According to some it is possible to explain a large part of the male unemployment differential in terms of so called "structural factors" such as age, number of children, location and social class which, it is argued, have little or nothing to do with differences in economic opportunities. According to others, much of the differential is explained by religion, or factors highly correlated with it, and not just by differences in the observed characteristics of Catholics and Protestants. This is the issue addressed in this paper. The econometric modelling results are interesting. Fa ir ly large and significant religion effects are found for single females. Ceteris paribus, single Catholic females are significantly less likely to be economically active and, if they are economically active, significantly less likely to be employed than single Protestant females. However, in the case of married women, the estimated religion effects are small once the partner's economic activity is taken into account. However, large and highly significant effects are found for their partners. Thus an indirect, rather than a direct, religion effect is found. Females with unemployed partners are, other things being equal, much more likely to be inactive. The operation of the benefit system is likely to be a major factor in generating this result. I I T H E L F S D A T A The dataset used in this paper consists of four years pooled Labour Force Survey ( L F S ) data for Northern Ireland. The four years are 1985, 1986, 1990 and 1991. These four years were chosen because religion data were not collected in the L F S between 1987 and 1989. The actual sample used in this paper consists of females aged 20 to 54 with a known religion — Catholic, Protestant, other religion and no religion. The age range 20 to 54 was chosen to avoid extensive modelling of participation in education and training schemes and retirement decisions. The data for the four years were pooled since the sample size in any single survey is quite small. When pooling the data, care was taken to ensure that the data were consistently defined and coded. See Murphy and Armstrong (1994) for further details. The L F S dataset used here is much larger than the Women Working Lives survey used by Davies et al. (1995). In the L F S , the employed, the unemployed and the economically inactive are defined as follows. Any adult who did some paid work or who had a job that they were temporarily away from or who was on a government employment or training scheme is classified as employed. Any adult without a job who was available to start a job within two weeks and who had either looked for work in the previous four weeks or was waiting to start a job already obtained is classified as unemployed. Finally, any adult not employed or unemployed is deemed to be economically inactive. This group includes the retired, the long-term sick and disabled and most full-time students. Table 1(a): Marital Status and the Presence of Children Women Aged 20 to 54 Catholic Religion Other All