Has women’s LFP rate in Rwanda fallen from 84% in 2014 to 52% in 2019?

A few days ago, a colleague (and friend) reached to me to ask if I knew what massive economic transformation has happened recently in Rwanda. I said “wow, really! huh?”. She pointed me to the statistics on female employment rates from Our World in Data which shows a large decline in FLFP (Figure 1). Similar patterns for labor participation of women, and to a lesser extent men, are in the World Bank’s World Development Indicators (Figure 2 below). This is not surprising since both data portals draw on the ILO which collates these national statistics from national statistics offices (note: these are not ILO modeled estimates, but national estimates from surveys).

Figure 1

Figure 2: Labor force participation of women and men from national surveys (downloaded from WDI 4/2023)

Has the share of women in the labor force in Rwanda fallen from 84% in 2014 to 52% in 2019? I highly doubt it. More likely, we are seeing the consequence of a major change in the internationally agreed-upon statistical definition of employment. Yes, really. It is quite likely to be a change of which mainly statistical-type-super-data-nerd economists would be aware. But it is one that all of us might want or need to be aware of, especially if you want to properly use country statistics and/or benchmark your own surveys with estimates from national statistical agencies.

In 2013, the 19^th International Conference of Labour Statisticians (ICLS) redefined several key labor statistics. It’s taken a few years for these new definitions/concepts to get integrated into questionnaires, into survey efforts, and, as I suspect above, to show up in country statistics. The ICLS19 made several changes but here I focus on one specific change: employment is now work for pay or profit. But wasn’t that was it was before? Not quite. A key feature to this change is that work that is mainly intended for “own-use production” is now excluded, where it was counted as employed before. Before ICLS19, production of primary products, whether for market or household consumption, was counted as employment. The new definition means that someone farming mainly for family consumption (i.e. subsistence farmers) is no longer “employed”. (Though they could still be employed by the new definition if they have another job that qualifies, and in the labor force if they being available and actively searching for work in the form of pay or profit). So subsistence farmers (or those otherwise growing crops mainly intended for home consumption) are “working”, but not “employed”. I put quotes to emphasize these specific terms.  Figure 3 offers a road-map of these concepts.

Figure 3: Schematic Overview of ICLS19 in Gaddis et al (2013)

In their paper, Gaddis, Oseni, Palacios-Lopez, and Pieters (2023) dig into the implications of this change. They discuss first the motivation, which I would characterize briefly as twofold. First, the old definition was seen as too broad to be a useful indicator of labor market performance (especially in countries where subsistence agriculture is a fallback option for workers who lose other types of employment). Second, it addressed the critique that own-use services (such as domestic work and child care), disproportionately performed by women, was being treated differently than own-use goods. These are fairly good reasons, in my view, but big concerns arise with operationalizing this vision.

In their study of Ghana, Malawi and Nigeria, they show that the new definition results in declines in employment-to-population rates, which is not surprising. In Malawi and Nigeria, employment-to-population rates decline by 20-30% (!). This does not reflect the share of farmers producing for family consumption, since some of them are also engaged in non-agricultural activities (and so would still be counted as employed). It also results in a markedly lower share of agricultural employment in total employment. In rural Nigeria, the share of male employment in agriculture falls from 60% to 33% with this new definition, and 12% to 5% for urban men. Obviously, it is important when digesting these labor statistics that you don’t mistake this for a signal that structural transformation is happening!

Also with the new definition, rural employment rates are more sensitive to the timing of data collection because the new definition relies on famers self-reporting intended use which this shifts over the agricultural season (as well as there being shifts from crop activities to livestock activities over the season).

And what of women? Since they are more likely to be farming crops for family consumption, their employment in agriculture falls more than that of men. So back to the Rwanda example we started with. I confess: I did not chase down the underlying data to confirm my hunch about what is behind the big decline in women’s employment in Rwanda. And if I am wrong, I will update this blog. I am not a betting person, but I would bet on my guess that there has not been a huge drop in women’s work in Rwanda but a big change in its measurement.

Gaddis et al emphasize that as more countries apply the new definition, it is important to broaden the default headline labor statistics. And I concur. Otherwise, we risk underestimating the important of agriculture in rural livelihoods, as well as undercounting women’s contributions and roles in agriculture.