Wage Subsidy Program Increases Female Hiring In Pakistan

A recent study conducted by the World Bank in collaboration with Rozee.pk has revealed that temporary wage subsidies can significantly enhance female hiring in Pakistan, where women's labor force participation is only 24.3%, compared to 80.3% for men. The study involved 1,227 firms and found that those offered a six-month wage subsidy were 10.7 percentage points more likely to hire women. In firms that had no female employees prior to the study, the likelihood of hiring a woman surged by nearly 28 percentage points when the subsidy was available. Researchers noted, "The cash works: Overall, the simple offer of this temporary subsidy caused a 10.7 percentage point surge in the likelihood of a firm hiring a woman," highlighting the effectiveness of financial incentives in overcoming employer biases. Furthermore, the study indicated that women hired under this program received a 7.4% increase in starting salaries and were more likely to be offered formal contracts.