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Nature or Nurture? Learning and the Geography of Female Labor Force Participation

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  • Alessandra Fogli
  • Laura Veldkamp

Abstract

One of the most dramatic economic transformations of the past century has been the entry of women into the labor force. While many theories explain why this change took place, we investigate the process of transition itself. We argue that local information transmission generates changes in participation that are geographically heterogeneous, locally correlated and smooth in the aggregate, just like those observed in our data. In our model, women learn about the effects of maternal employment on children by observing nearby employed women. When few women participate in the labor force, data is scarce and participation rises slowly. As information accumulates in some regions, the effects of maternal employment become less uncertain, and more women in that region participate. Learning accelerates, labor force participation rises faster, and regional participation rates diverge. Eventually, information diffuses throughout the economy, beliefs converge to the truth, participation flattens out and regions become more similar again. To investigate the empirical relevance of our theory, we use a new county-level data set to compare our calibrated model to the time-series and geographic patterns of participation.

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Bibliographic Info

Article provided by Econometric Society in its journal Econometrica.

Volume (Year): 79 (2011)
Issue (Month): 4 (07)
Pages: 1103-1138

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Handle: RePEc:ecm:emetrp:v:79:y:2011:i:4:p:1103-1138

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References

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Citations

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Cited by:
  1. Fakih, Ali & Ghazalian, Pascal L., 2013. "Female Labour Force Participation in MENA's Manufacturing Sector: The Implications of Firm-Related and National Factors," IZA Discussion Papers 7197, Institute for the Study of Labor (IZA).
  2. Nathan Yang, 2011. "An Empirical Model of Industry Dynamics with Common Uncertainty and Learning from the Actions of Competitors," Working Papers 11-16, NET Institute.
  3. Arslan, Yavuz & Taskin, Temel, 2011. "Explaining the gender gaps in unemployment across OECD countries," MPRA Paper 34873, University Library of Munich, Germany.
  4. Jonas D. M. Fisher, 2012. "Comment on "The Geography of the Great Recession"," NBER Chapters, in: NBER International Seminar on Macroeconomics 2012 National Bureau of Economic Research, Inc.
  5. Graziella Bertocchi & Monica Bozzano, 2012. "Women, Medieval Commerce, and the Education Gender Gap," CHILD Working Papers Series 10, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
  6. repec:mod:depeco:0007 is not listed on IDEAS
  7. Alessandra Fogli & Enoch Hill & Fabrizio Perri, 2012. "The Geography of the Great Recession," NBER Chapters, in: NBER International Seminar on Macroeconomics 2012 National Bureau of Economic Research, Inc.
  8. Martin Ljunge, 2012. "The Spirit of the Welfare State? Adaptation in the Demand for Social Insurance," Journal of Human Capital, University of Chicago Press, vol. 6(3), pages 187 - 223.
  9. Diego Amador & Raquel Bernal & Ximena Peña, 2013. "The Rise in Female Participation in Colombia: Fertility, Marital Status or Education?," DOCUMENTOS CEDE 010551, UNIVERSIDAD DE LOS ANDES-CEDE.
  10. World Bank, 2011. "Work and Family : Latin American and Caribbean Women in Search of a New Balance," World Bank Other Operational Studies 12489, The World Bank.
  11. Jean-Paul L'Huillier, 2012. "Consumers' Imperfect Information and Price Rigidities," EIEF Working Papers Series 1209, Einaudi Institute for Economic and Finance (EIEF), revised Aug 2012.
  12. Stefania Albanesi, 2009. "Comment on "Marriage and Divorce since World War II: Analyzing the Role of Technological Progress on the Formation of Households"," NBER Chapters, in: NBER Macroeconomics Annual 2008, Volume 23, pages 277-290 National Bureau of Economic Research, Inc.
  13. Kok, Suzanne & Bosch, Nicole & Deelen, Anja & Euwals, Rob, 2011. "Migrant Women on the Labour Market: On the Role of Home- and Host-Country Participation," IZA Discussion Papers 5817, Institute for the Study of Labor (IZA).
  14. Jane Leber Herr & Catherine Wolfram, 2009. "Work Environment and “Opt-Out" Rates at Motherhood Across High-Education Career Paths," NBER Working Papers 14717, National Bureau of Economic Research, Inc.
  15. Bratti, Massimiliano & Cavalli, Laura, 2013. "Delayed First Birth and New Mothers' Labor Market Outcomes: Evidence from Biological Fertility Shocks," IZA Discussion Papers 7135, Institute for the Study of Labor (IZA).
  16. Rainald Borck, 2011. "Adieu Rabenmutter - The Effect of Culture on Fertility, Female Labour Supply, the Gender Wage Gap and Childcare," CESifo Working Paper Series 3337, CESifo Group Munich.

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