Slowing Women's Labor Force Participation: The Role of ...prados/USC_10022014.pdf · Slowing Women's Labor Force Participation: The Role of Rising Income Inequality Stefania Albanesi,

Slowing Women's Labor Force

Participation: The Role of Rising Income

Inequality

Stefania Albanesi, FRBNY and CEPRMará José Prados, USC

USC - October 2, 2014

The views expressed here are those of the authors and do not necessarily re�ect

the views of the Federal Reserve Bank of New York or the Federal Reserve System.

1 / 63

Trends in LFP and Wages

I Slowing female participation and convergence in wages sincethe mid-1990s in the US.

.4.4

5.5

.55

.6F

em

ale

labor

forc

e p

art

icip

ation r

ate

1.3

1.4

1.5

1.6

Gender

wage g

ap

1975 1980 1985 1990 1995 2000 2005 2010Year

Gender wage gap Female labor force participation rate

Gender wage gap is computed as mean wage of male workers over mean wageof female workers for full time, full year workersThe values are three−year moving averages.

Gender Wage Gap and Female LFP, married workers

Source: March Supplement of CPS

2 / 63

Trends in LFP and WagesBy education

I Phenomenon is more pronounced for college women.

.3.4

.5.6

.7F

em

ale

la

bo

r fo

rce

pa

rtic

ipa

tio

n r

ate

1.2

1.3

1.4

1.5

1.6

1.7

Ge

nd

er

wa

ge

ga

p

1975 1980 1985 1990 1995 2000 2005 2010Year


Gender wage gap is computed as mean wage of male workers over mean wageof female workers for full time, full year workersThree−year moving averages

College


.3.4

.5.6

.7F

em

ale

la

bo

r fo

rce

pa

rtic

ipa

tio

n r

ate

1.2

1.3

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1.5

1.6

1.7

Ge

nd

er

wa

ge

ga

p

1975 1980 1985 1990 1995 2000 2005 2010Year


Gender wage gap is computed as mean wage of male workers over mean wageof female workers for full time, full year workersThree−year moving averages

High school or less



3 / 63

Trends in LFP and WagesSkill premium by sex

I The growth in the skill premium has accelerated for men andslowed for women since the mid-1990s, resulting in a growingdivergence.

1.4

1.6

1.8

2

1975 1980 1985 1990 1995 2000 2005 2010Year

College Premium, Males College Premium, Females

Premium is computed as mean wage of college workers over mean wageof non−college workers for full time, full year workers

Skill Premium

11

.05

1.1

1.1

51

.2skill

pre

miu

m m

en

/skill

pre

miu

m w

om

en

1975 1980 1985 1990 1995 2000 2005 2010Year

Rolling three years average

all fulltime workers

Ratio of Male to Female Skill Premium

Ratio of mean hourly wages between workers with college degree and those without a college degree, forFT-FY workers, regardless of marital status. Three year centered moving averages.


4 / 63

Hypothesis

I Rise in skill premium can explain the lack of convergence inparticipation and wages across genders since the early 1990s.

I Mechanism:

I Rise in male earnings generates negative wealth e�ect onfemale participation and market hours.

I Reduced attachment to the labor market, reduces experienceand earnings for skilled women relative to skilled men.

I Positive assortative matching ampli�es e�ect on skilledwomen.

I Objective: Document empirical evidence on participation byeducation and household type, explore mechanismquantitatively.

5 / 63

Hypothesis

I Rise in skill premium can explain both the lack of convergencein participation and wages across genders since the early 1990s.

I Preview of �ndings:

I Mechanism can account for large fraction of lack ofconvergence in female participation to male in 1995-2005 forcollege women and women married to college husbands.

I Mechanism can partially reproduce the lack of convergence infemale wages to males in 1995-2005 and the lower growth inthe skill premium for women.

6 / 63

Related Literature

I Theory: Fernandez (2013), Fogli and Veldkamp (2013)

I Rise in female participation due to learning about costs for thehousehold.

I S-shape as learning slows with most women in the labor force.

I Empirical: Blau and Kahn (2013)

I International comparison, lack of part time and access todaycare.

I Empirical: Fortin (2013)

I Evolution of gender attitudes.

7 / 63

Outline

I Evidence

I Model

I Quantitative Analysis

I Ongoing work

8 / 63

Evidence

Data and Sample

I CPS March Supplement, 1964-2009, and PSID, 1985-2011.

I Adults ages 25 to 64.

I Married (for most of the analysis)

I Labor force participation de�ned as: working or looking forwork at least 40 weeks a year.

10 / 63

Skill PremiumMeasuring the Phenomenon

1.3

1.4

1.5

1.6

1.7

1.8

1.9

2

1976 1980 1984 1988 1992 1996 2000 2004

Skillpremium,full‐9mefull‐yearworkers

Skillpremium,malesSkillpremium,females


Dashed line corresponds to linear trend for 1976-1991, projected out of sample.

11 / 63

Skill PremiumGender Wage Gap by Education

I The acceleration in the male skill premium post-1995 is alsoassociated with a rise in the gender wage gap for collegeworkers.

Skill Premium Male/Female Wages

Male Female HS Coll

Average 1995-2005

Actual 1.86 1.64 1.29 1.46

Projected 1.75 1.60 1.19 1.32

Actual-Projected 0.11 0.04 0.10 0.14

Actual-Projected% 6.29 2.5 8.4 10.61Source: Authors' calculations from CPS.

12 / 63

Labor supply of womenI The slowing of female participation is driven by prime age

married women. The participation of married men hasremained stable. Female LFP by Age

.4.5

.6.7

.8.9

LFP

1976 1981 1986 1991 1996 2001 2006 2011Year

Married women Single womenMarried men

Labor force participation rates

Source: March Supplement of CPS13 / 63

Measuring the PhenomenonLabor force participation of married women

I Procedure:

I Estimate probit model of labor force participation of marriedwomen for 1964-1994.

I Use estimated parameters to project female labor forceparticipation from 1995-2009.

I Compare projected and actual series.

14 / 63

Labor supply of married womenParticipation by education

.3.4

.5.6

.7.8

1964 1969 1974 1979 1984 1989 1994 1999 2004 2009Year

High school College

Labor force participation of married womenby education level, age−adjusted


Dashed line corresponds to 1965-1994 participation probit, in and out of sample.

15 / 63

Measuring the PhenomenonAge-adjusted participation by education and husband's education

I The slowdown in participation is most pronounced for marriedwomen with college and with college husbands.

Married Women's Participation

HS Coll HS Husb Coll Husb

Average 1995-2005

Actual 0.57 0.65 0.61 0.60

Projected 0.63 0.74 0.67 0.70

Actual-Projected -0.05 -0.09 -0.06 -0.10

Actual-Projected% -9.5 -12.1 -8.9 -14.0

Source: Authors' calculations from CPS.

16 / 63

Labor supply of womenParticipation by household type, age-adjusted

I The slowdown in participation has been greatest for highschool and college women with college husbands.


Household Types (M-F) HS-HS C-HS HS-C C-C

Average 1995-2005

Actual 0.6 0.56 0.73 0.63

Projected 0.66 0.67 0.79 0.75


Actual-Projected% -9.8 -17 -8 -17Source: Authors' calculations from CPS.

17 / 63

Distribution of Household Types

I The fraction of college-college households is above 20% sincethe mid-1990s.

Figure : Fraction of households by education pairs

��

��

� �� Household type corresponds to husband-wife educational attainment.


18 / 63

Labor supply of married womenThe role of husband's earnings

05

1015

20%

diff

eren

ce

1 2 3 4 5Quintiles of husband’s earnings

Married Women LFP: Actual vs Projected



The di�erence between 1995-2009 average and the projected valuesover that period is positively related to husband's earnings.Alt: Participation by husband's deciles

19 / 63

Labor supply of married womenParticipation by husband's earnings

I The slowdown in participation is more pronounced for womenwith husband in the top decile of the male labor incomedistribution, suggesting role of negative income e�ect.


Aggregate Husb <10% Husb 50% Husb> 90%

Average 1995-2005

Actual 0.65 0.75 0.68 0.50

Projected 0.75 0.80 0.76 0.67


Actual-Projected% -13 -6 -12 -25


Fert.

20 / 63

Negative Income E�ectOne and Two Earner Households

I Average labor earnings of husbands are signi�cantly higher inone-earner households.

Table 2: Sensitivity of female labor participation to husband’s earnings bracket

Coef. Std. Err. z P>z [95% Conf. Interval]

age 0.0060 0.0002 32.11 0.00 0.006 0.006education years 0.0900 0.0011 81.97 0.00 0.088 0.092

degree 0.1930 0.0112 17.30 0.00 0.171 0.215degreeXperc25 -0.2111 0.0169 -12.46 0.00 -0.244 -0.178degreeXperc50 -0.2820 0.0127 -22.12 0.00 -0.307 -0.257degreeXperc75 -0.4821 0.0135 -35.68 0.00 -0.509 -0.456degreeXperc90 -0.8764 0.0120 -72.78 0.00 -0.900 -0.853

constant -1.1311 0.0157 -72.19 0.00 -1.162 -1.100

Table 3: Average wage of husband, by household types

One-earner Two-earner One-earner hh/Period households households Two-earner hh

1976-1993

No College - No College 18.8 16.1 117%No Coll Husb - Coll Wife 22.1 17.1 129%

College Husb - No Coll Wife 29.7 23.0 129%College - College 31.2 24.1 130%

1994-2008

No College - No College 19.4 18.0 108%No Coll Husb - Coll Wife 25.2 20.0 126%

College Husb - No Coll Wife 38.5 29.0 133%College - College 44.7 33.1 135%

in one and two-earner households have become less di↵erent in this last period, whereas college de-

gree men in two earner households are further apart, in terms of earnings, from those in one-earner

households now than what they were before 1994.

Figure 11 shows the labor force participation rates of married women, by household education

types. The graph shows the rates relative to 1993. There is a steep increase in participation until

1993, and after that there is a change in trend for all married women, regardless of education level.

However, the slow down is more pronounced for married women with college degree, since the slope

during the previous decades was steeper than for women without college. The participation of

women married to a college degree husband stopped increasing completely after 1993.

The role of fertility Another potential explanation to the observed behavior of married women’s

labor force participation could be connected to changes in fertility. Women with children are less

likely to participate in the labor force, and hence increases in fertility could a↵ect labor force

participation of married women. However, we can rule out this explanation as the only cause

of the observed behavior of female labor force participation. As shown in figure 12, the decline

in the growth rate of labor force participation was similar for women with and without children.

11


Regressions21 / 63

Negative Income E�ectHousehold Net Worth

I The corresponding rise in the dispersion of household networth since the mid-1990s likely also contributed to thenegative income e�ect.

0"

200"

400"

600"

800"

1,000"

1,200"

1,400"

1,600"

1989" 1992" 1995" 1998" 2001" 2004" 2007" 2010"

Thou

sand

)dollars)

Net"Worth"by"Household"Educa=on"Type"

C,"C"

HS"wife,"C"husb"

C"wife,"HS"husb"

Hs,"HS"

Mean"

Source: Survey of Consumer Finances

Figure 16: Household Net Worth

3 Model

The model is a non-unitary model of household labor supply, where individuals are “egoistic” and

have independent utility functions, but it is assumed that the household decision-making process

is cooperative, so that household decisions are Pareto e�cient.4, 5

In this economy there is a continuum of measure one of individuals, and each male individual

is assumed to be married to a female individual. Each of them draw a (permanent) productivity

value ✓i from their corresponding distributions. The distributions of ✓is depend on the individual’s

gender and education level. We consider two possible - exogenously given - education levels: less

than college (we call this category high school), and college degree or more (we call this category

college). Therefore, there are four kinds of households defined by the skill level of the partners:

j 2 J = {hs � hs, hs � coll, coll � hs, coll � coll} (measure µe over the set J of household types,

so thatP1

0

P10 µe (em, ef ) = 1). We take the evolution of µe over time as exogenous.

Individual i is indexed by gender s = m, f and age j = 1, .., J .

The model allows for human capital accumulation in the form of learning by doing (cumulative

working experience, non specific, subject to depreciation). This implies that workers lose skills

when they are unemployed or out of the labor force.

Individual labor earnings yij,t are a function of hours worked (li), worker’s stock of human capital

4This result can be achieved by an alternative interpretation of this process, namely assuming that there is a twoperiod decision process, and there is some exogenous sharing rule, given by characteristic of the marriage contract,for instance.

5The model is a particular case of the collective labor supply model in Chiappori (1992), where we assume afixed household welfare function and bargaining weights for all households, whereas in Chiappori’s general case, thehousehold welfare function is allowed to depend on prices, and endowments if any.

15

Source: Survey of Consumer Finances.

22 / 63

Labor Flows

I PN (exit: participation to non-participation) �ow ratesincreased for all, while NP (entry) �ow rates declined forwomen married to college husbands after1995. Patterns byhousehold type:

All Household Type Husband's Education

HS-HS HS-C C-HS C-C HS Coll

PN 1984-1994 0.060 0.056 0.057 0.038 0.048 0.061 0.055

1995-2005 0.073 0.063 0.075 0.045 0.074 0.072 0.065

NP 1984-1994 0.212 0.243 0.190 0.304 0.249 0.209 0.231

1995-2005 0.209 0.220 0.195 0.345 0.220 0.215 0.207Yearly transition rates. Source: Authors' calculations from the PSID.

23 / 63

Summary

I Skill premium for men rises by 6.3% in 1995-2005

I Male/female wage ratio rises by 11% for college workers

I Labor force participation of married women in 1995-2005relative to pre-1995 trend

I 12% lower for college womenI 14% lower for women with college husbandsI 25% lower for women with husbands in the to 10% of the

earning distributionI Similar behavior for hours

I PN �ow rates rise, NP rates fall post 1995, especially forwomen with college and with college husbands.

24 / 63

Quantitative Analysis

ModelHousehold Labor Supply

I Non-unitary households:

I Households comprise two married partners of di�erent gender.I Partners have independent utility functions.

I Marriage and educational attainment exogenous. No divorce.

I Heterogeneity in individual productivity.I Assortative matching by education based on empirical

distribution of household types.

I Intensive and extensive labor supply decisions.

I E�cient market and home hours allocation.

I Wages endogenous due to on the job acquisition of humancapital.

26 / 63

ModelHousehold Problem

maxc isj ,hisj ≥0,l

isj ∈{0,[l ,l ]},bj+1,ks

j+1≥0∑J

j=1 βj∑

s=f ,m λsu(c isj , l

isj + hisj

)

s.t.k isj+1 = F (l isj , k

isj )

Hj = G (hfj , hmj )

∑s=f ,m c isj + qbij+1 ≤

∑s=f .m W is

j l isj + bij for j = 1, 2, ...J

∑

s=f ,m

c isJ ≤ bJ

ks0 = ks

Hj given for j = 1, .., J

27 / 63

ModelHousehold Problem

I Indivisible labor:

l isj =

{0 if pisj = 0

≥ l if pisj = 1

I Home hours requirement:

Hj = G (hfj , hmj )

I Hj exogenously given for all j = 1, 2, ...J

28 / 63

ModelWages and Human Capital

I Wages:W is

j = θsw s(1 + ξsj eis)k isj

for s = f ,m, i = c, hs, for all j = 1, 2, ...J − 1

I �xed individual productivity θs , with gender speci�cdistribution

I gender speci�c baseline wage w f ≤ wm

I skill premium, ξsj , indicator for college e is

I human capital evolution (Imai and Keane, 2004)

F (l isj , kisj ) =

[(1− δ) + A

(l isj)α − Bl isj

]k isj

for δ, α ∈ [0, 1] , A,B > 0

I Endogenous gender wage gap and skill premium due to on thejob acquisition of human capital, even with w s and ξsjexogenous.

29 / 63

Optimal Household Allocation

I Pareto e�cient consumption and home hours allocation.

I Income e�ects:I Participation is zero if own productivity is su�ciently low and

non-labor income is su�ciently high.I Rise in non-labor income causes market hours to drop and

eventually participation to go to zero.I Non-labor income is the sum of partner's labor income and

savings.

I Gender wage gap causes wives' participation and market hoursto be lower than husbands on average, triggering a decline inboth, if the skill premium rises.

30 / 63

Calibration

I Household types (wife-husband):hs − hs, hs − coll , coll − hs, coll − coll

I Four periods: 25-39, 40-54, 55-69, 70+ yo

I Productivity distribution:

I θs ∼ logN(θ̄, σs) for s = f ,m,

I Strategy:

I Set most parameters based on independent evidence.I Set remaining parameters to match 1980 aggregate

participation, labor earnings dispersion by gender,home/market hours ratio.

31 / 63

CalibrationFunctional Forms

I Utility:

u(c isj , l

isj + hisj

)=

(c isj

)1−σ

1− σ − φs(l isj + hisj

)1+ 1γs

1 + 1γs

I σ, φs > 0, γs ∈ (0, 1) for s = f ,m

I Home production:

G (hf , hm) =[ψf(hf)ρ

+ ψm (hm)ρ]1/ρ

I ρ, ψs ∈ (0, 1) for s = f ,m,∑

s ψs = 1

32 / 63

Calibration

Table : Parameters calibrated based on independent evidence

Utility Human capital Home production

σ 1.1 α 0.22 ψf 0.5

γf , γm 3.82, 3.82 A 0.14 ρ 0.65

λf , λm 0.5, 0.5 δ 1− 0.35 {H2,H3} {1.018, 1.031}H1

β 0.97815 B 2.2160e − 04

Time evolution of ξ and w : estimated from data.

33 / 63

Calibration

Table : Parameters calibrated for 1980 to match population moments

Utility Home Production θ distribution

φft φmt H1 σm σf

0.169 0.142 2.74 0.48 0.35

Table : Data/Model Comparison

1980 Data Model

Women Men Women Men

Participation 0.44 0.86 0.44 0.86

Coe�. var. earnings distribution 1.34 0.84 1.34 0.84

Market/home hours 0.922 1.23

34 / 63

Experiment 1: Steady state rise in the skill premium

I Exercise:

I Increase ξsj to match actual 1995-2005 average skill premiumby gender, all other equal.

I Compare 1980 to 1995, as if steady states.

I Results:I large drop in labor supply of women with college husbands,

similar magnitude as in data;I large drop in labor supply of women in college-college

households, approx. 2/3 of drop in data;I rise in skill premium for men larger than for women, and rise in

male/female wage ratio higher for college than high school, asin data.

35 / 63

Experiment 1Response of women's labor supply

I Decline in participation in the model greatest for high schoolwomen with college husbands, as in data. Participation ofcollege women with high school husbands rises, contrary todata.


Household Types HS-HS HS-C C-HS C-C

Model 1980 calibration: 1995-2005 skill premium-actual

percent change 0 −29.5 12.6 −11.3Data Average 1995-2005: actual- pre1995 projection

percent change −10 −17 −8 −17

36 / 63

Experiment 1Response of women's labor supply

I Higher skill premium reduces participation of women withcollege husbands. Participation lower both for high school andcollege women.


HS Coll HS Husb Coll Husb

Model 1980 calibration: at 1995-2005 skill premium-actual

percent change −2.1 −1.7 1.3 −17.2

Data Average 1995-2005: actual-projected using pre-1995 growth

percent change −9.5 −12 −9 −14

37 / 63

Experiment 1Response of wages by gender

I Skill premium rises more for men in the model as in the data.Male/female wage ratio rises more for college than high schoolworkers, as in the data.


Male Female HS Coll

Model 1980 calibration: 1995-2005 skill premium-actual

percent change 25 23.3 1.5 2.9

Data Average 1995-2005: actual- pre1995 projection

percent change 11.4 9.2 8.4 10.61

38 / 63

Experiment 2: Cohort simulations

I Simulate model every 5 years between 1965 and 2005, examinebehavior of cohorts who are 25-39 in each year throughouttheir lifetime.

I Stable decline in φf , capturing labor supply forces (matchesparticipation growth between 1965-1995, projected forward)

I w f /wm and wm as in data, cohort by cohort

I Skill premium:I 1965-1990: Stable process estimated from data.I 1995-2005: New process estimated from data, with higher

level and higher growth rate.I Unanticipated change in the skill premium =⇒ active

households reoptimize in 1995 based on new process.

39 / 63

Experiment 2Inputs

Skill Premium

1980 Level ξf1 0.572 ξm1 0.662

pre − 1995 Trend (5 year growth factor) F 1.036 M 1.054

1995 Level ξf1 0.74 ξm1 0.80

post − 1995 Trend (5 year growth factor) F 1.037 M 1.06

40 / 63

Experiment 2Baseline results

I Participation drops most for women with college husbands,especially those with high school. Participation rises for collegewomen with high school husbands, contrary to data.

Married Women's Participation, 1995-2005 Average


Model actual − pre-1995 projected

percent change 0 −12 7 −4

Data actual − projected using pre-1995 growth

percent change −10 −17 −8 −17

Constant φf results

41 / 63


I Participation drops most for women with college husbands,and for high school women.


Husband's education Wife's education

HS C HS C

Model actual - projected pre-1995

percent change 1 −14 −1.1 5

Data actual-projected pre-1995 growth

percent change −8.9 −14 −9.5 −12.1


42 / 63


I Simulation captures small fraction of the gender divergence inthe skill premium and of the slowing convergence in wagesacross gender for skilled workers.


1995-2005 Average Male Female HSch Coll

Model actual - projected pre-1995

percent change 14.6 16 1.0 2.6

Data actual - projected pre-1995 growth

percent change 11.4 9.2 8.4 10.61


43 / 63

Summary

I Flattening participation of married women accounted by adecline in growth and level of participation of women marriedto college and high income husbands, suggesting role forincome e�ects.

I Quantitative analysis:

I Income e�ects can account for approx. 2/3 of the decline inparticipation of women with college husbands relative topre-1995 trend for 1995-2005.

I Model over predicts fall in participation of women in HS-Chouseholds, does not predict decline in participation of womenin HS-HS and HS-C households.

I Model partially captures relative rise in skill premium for menand in male/female wage ratio for college workers.

44 / 63

International Evidence

I Most OECD countries display a negative correlation betweenthe growth in inequality and women's participation.

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Figure : Participation and top 10%/average income ratio. Source: OECD

45 / 63

Ongoing work

I Income tax: incorporate 1993 tax reform.

I Household production: allow for adjustment in householdproduction margin (substitute with market goods).

I Explore trends in φ versus trends in household productiontechnology.

I Fertility choice.

46 / 63

Ongoing Work: Additional ChannelsFertility choice with quality/quantity trade-o�

I Low opportunity cost of additional children in high income one

earner households =⇒ quantity of children may rise inaddition to quality.

I Hypothesis is consistent with rise in fertility for college-collegehouseholds and high income husband households in themid-1990s.

47 / 63

Fertility

48 / 63

FertilityParticipation by husband's earnings & number of children

I Flattening of participation occurs for women with and withoutchildren, suggesting decline in participation not driven byhigher demand for children.

.2.4

.6.8

1975 1985 1995 2005 1975 1985 1995 2005

no children at least one child

10 percentile 50 percentile

90 percentile

fem

ale

LF

part

icip

ation r

ate

s

Year

Graphs by Wife’s own children in household

by husband’s earnings percentiles

Female participation rate


49 / 63

Back Up Slides

Labor supply of married womenParticipation by household type

.3.4

.5.6

.7.8

1976 1984 1992 2000 2008Year

less than college, both h: college, w: less than college

never married, high school

Female Labor Force Participation Rate

.3.4

.5.6

.7.8

1976 1984 1992 2000 2008Year

h: less than college, w: college college, both

never married, college

Female Labor Force Participation Rate

Household type corresponds to husband-wife educational attainment.


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Labor supply of married womenHours by household/husband type

600

800

1000

1200

1400

1600

1976 1984 1992 2000 2008Year

less than college, both h: less than college, w: college

h: college, w: less than college college, both

Female Labor Market Hours

500

1000

1500

1976 1984 1992 2000 2008Year

husb. earn. in 10th perc husb. earn. in 50th perc

husb. earn. in 90th perc

by husband’s earnings percentile


Household type corresponds to husband-wife educational attainment.


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Labor supply of married womenHours by education

800

1000

1200

1400

1600

1976 1984 1992 2000 2008Year

high school college

Married women



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Intra-household inequality

.5.7

.91.1

1.3

avera

ge Y

_f/Y

_m

1976 1980 1984 1988 1992 1996 2000 2004 2008Year

Less than college wife College wife

Two−earner householdswhere husband has high school deg.

Wife to husband earnings ratio

.5.7

.91.1

1.3

avera

ge Y

_f/Y

_m

1976 1980 1984 1988 1992 1996 2000 2004 2008Year

Less than college wife College wife

Two−earner householdswhere husband has college deg.

Wife to husband earnings ratio

Source: March CPS

Note: the ratio of wife to husband's earnings was computed for household where both

partners worked for at least 45 weeks that year, and each earned at least $5,000

(constant 2005 USD)

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Earnings dispersion by gender1.6

1.8

22.2

2.4

1975 1980 1985 1990 1995 2000 2005 2010Year

Males Females

full−time, full−year workers

Earnings dispersion, 90perc/50perc

1.6

1.8

22.2

2.4

1975 1980 1985 1990 1995 2000 2005 2010Year

Males Females

full−time, full−year workers

Earnings dispersion, 50perc/10perc


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Labor supply of men

I Participation of married men has remained stable. Female LFP

.55

.65

.75

.85

.95

1976 1984 1992 2000 2008Year

all men single (never married) men

married men

Male Labor Force Participation Rate


56 / 63

Labor Supply of Married Women

I Participation has �attened only for prime age married women.Female LFP

.3.4

.5.6

.7Labor

Forc

e P

art

icip

ation R

ate

1976 1984 1992 2000 2008Year

21−31 y−o. 32−42 y−o

43−53 y−o 54−64 y−o

LFP of married women by age


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Labor supply of married women

Participation by husband's earnings Actual vs Projected

.2.3

.4.5

.6.7

.8.2

.3.4

.5.6

.7.8

1976 1984 1992 2000 2008

1976 1984 1992 2000 2008

10th percentile 50th percentile

90th percentile

LFP, actual LFP, predicted

Year

Graphs by Husband’s earn. percentile



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Labor supply of married women

Participation by husband's earnings and number of children LFP byhusband

.2.4

.6.8

1975 1985 1995 2005 1975 1985 1995 2005

no children at least one child

10 percentile 50 percentile

90 percentile

fem

ale

LF

pa

rtic

ipa

tio

n r

ate

s

Year

Graphs by Wife’s own children in household

by husband’s earnings percentiles

Female participation rate


59 / 63

Negative Income E�ect

I Strong negative e�ect of husband's income on participation.Two earners

Coef. Robust Std. Err. [95% Conf. Interval]

age 0.005 0.0002 0.0047 0.0053

educ_years 0.108 0.0009 0.1059 0.1096

college -0.171 0.0108 -0.1927 -0.1501

perc25 -0.208 0.0048 -0.2174 -0.1982

perc50 -0.408 0.0086 -0.4252 -0.3913

perc75 -0.427 0.0063 -0.4398 -0.4148

perc90 -0.773 0.0056 -0.7844 -0.762

collegeXper25 -0.024 0.0117 -0.0466 -0.0006

collegeXper~50 0.0147 0.0211 -0.0267 0.0562

collegeXper75 -0.085 0.0126 -0.1099 -0.0602

collegeXper90 -0.107 0.0124 -0.1320 -0.0834

constant -1.028 0.0136 -1.0552 -1.001Source: Authors' calculations from CPS.

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Experiment 2Constant φf results

Baseline Results

I Participation drops most for women married to collegehusbands, especially those with high school. But participationrises for college women with high school husbands, contrary todata.



Model actual skill premium − pre-1995 projected skill premium

percent change 0 −23.3 7.3 −4

Data actual − projected using pre-1995 growth

percent change −9.8 −17 −8 −17

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I Participation drops most for women with college husbands andfor women with college.


Husband's education Wife's education

HS C HS C


percent change 1 −8 −1.6 0.5

Data actual-projected using pre-1995 growth

percent change −8.9 −14.0 −9.5 −12.1

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I Simulation captures the gender divergence in the skillpremium. It does not capture the slowing convergence inwages across gender for skilled workers, due to the strong risein participation and hours of college women with high schoolhusbands.


1995-2005 Average Male Female HS Coll


percent change 14.5 15.9 −0.4 1

Data actual-projected using pre-1995 growth

percent change 11.4 9.2 8.4 10.6

Baseline Results

63 / 63

Documents

Slowing Women's Labor Force Participation: The Role of ...prados/USC_10022014.pdf · Slowing Women's Labor Force Participation: The Role of Rising Income Inequality Stefania Albanesi,