Paper short abstract:

Multiethnic Malaysia is characterized by significant spatial variation in social norms which provides an ideal setting to investigate the role of early-life exposure to location specific norms (growing up in locations with traditional norms) on women's later life decisions

Paper long abstract:

Malaysia's female labor force participation (LFP) rate remains low relative to its level of economic development. Given the country’s multi-ethnic social structure, this paper re-examines the barriers to women’s labor market participation with a particular focus on social factors. We hypothesize that an individual's place of birth captures the long-term influence of localized customs, gender roles, and family values, which vary significantly across Malaysia (e.g., the Malay heartland states of Kelantan and Terengganu versus the rest of the country) and can act as a social determinant of women’s LFP decisions. To test this, we analyze the determinants of women’s labor market entry and exit decisions, focusing on the role of place of birth. The study uses a hybrid dataset combining individual-level data from the MPFS 2014 survey with district-level labor market data from the HIS 2012 survey. The findings reveal that women who spent their childhood in Kelantan and Terengganu are significantly more likely to opt out of the labor market, while no such effect is observed for men. Complementary analysis using the 2012 World Values Survey on attitudes toward homosexuality, prostitution, abortion, divorce, premarital sex, and wife-beating further supports the hypothesis. Malaysians residing in Kelantan and Terengganu exhibit significantly higher support for conservative social norms. Overall, the findings highlight the persistent influence of location-specific social customs and gender norms on women’s economic participation. Reform efforts aimed at shifting entrenched social attitudes toward women would play a crucial role in increasing female employment and reducing the gender gap in LFP.