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Change in Women's Labor Force Participation: The Effect of Changing Experience

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Author Info
Claudia Olivetti (University of Pennsylvania)

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Abstract

Over the past two decades married women's labor force participation has shown a considerable increase in the US. In particular, both the cross sectional and the life cycle behavior of married women's hours worked has undergone a substantial change. I show that a key factor underlying this trend is the change in behavior for married women with children. In particular, while in the past married women of childbearing age used to specialize in childrearing and homeproduction activities at the expense of engaging in market work, they now do not curb their labor participation. What gives rise to this change in behavior? In this paper I focus on relative changes in returns to experience as an explanation. In particular, I quantitatively assess the contribution of changes in the return to experience to the change in married women's life-cycle profiles of hours worked. I build a life-cycle model with human capital accumulation and home production in which the basic unit of analysis are married couples with children, and calibrate it using data from the 1970s and the 1990s. I show that changes in returns to experience can account for a large part of observed changes. I also demonstrate that decreases in the gender wage gap cannot account for much of the change in the shape of life cycle profiles for women.

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Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 1572.

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Date of creation: 01 Aug 2000
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Handle: RePEc:ecm:wc2000:1572

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  2. Olsen, Randall J, 1994. "Fertility and the Size of the U.S. Labor Force," Journal of Economic Literature, American Economic Association, vol. 32(1), pages 60-100, March. [Downloadable!] (restricted)
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  9. Thomas Mroz, . "The Sensitivity of an Empirical Model of Married Women's Hours of Work to Economic and Statistical Assumptions," University of Chicago - Population Research Center 84-8, Chicago - Population Research Center. [Downloadable!]
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  10. Joseph Hotz, V. & Klerman, Jacob Alex & Willis, Robert J., 1993. "The economics of fertility in developed countries," Handbook of Population and Family Economics, in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 7, pages 275-347 Elsevier. [Downloadable!] (restricted)
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  12. Susumu Imai & Michael P. Keane, 2004. "Intertemporal Labor Supply and Human Capital Accumulation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(2), pages 601-641, 05. [Downloadable!] (restricted)
  13. James J. Heckman & Lance Lochner & Christopher Taber, 1998. "Explaining Rising Wage Inequality: Explorations with a Dynamic General Equilibrium Model of Labor Earnings with Heterogeneous Agents," NBER Working Papers 6384, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  14. Juhn, Chinhui & Murphy, Kevin M, 1997. "Wage Inequality and Family Labor Supply," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 72-97, January. [Downloadable!] (restricted)
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