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The service sector and female market work

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  • Michelle Rendall

Abstract

This paper develops a multi-sector model to: (i) quantify the feedback from women entering the labor force on the service sector size, and (ii) compute differences in hours worked by gender from taxes, structural change and female employment. Increases in female employment, due to rising wages and structural change, account for a sizable portion of services. Counterfactual results suggest that: (1) working women account for 32 percent of the rise in service employment; (2) using standard micro estimates of Frisch elasticities with two-person households, tax rates account for the majority of Europe-US differences in hours worked, and (3) subsidies to employment circumvent the tax effect on hours, but lead to welfare losses of 5 to 8 percent. The second result validates the relationship between tax levels and hours worked first proposed by Prescott (2004) without using large Frisch elasticities.

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Bibliographic Info

Paper provided by Institute for Empirical Research in Economics - University of Zurich in its series IEW - Working Papers with number 492.

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Date of creation: Jul 2010
Date of revision: Feb 2014
Handle: RePEc:zur:iewwpx:492

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Keywords: Technological progress; sectoral labor allocation; female labor supply; labor demand; taxation;

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References

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  1. Greenwood, Jeremy & Guner, Nezih, 2008. "Marriage and Divorce since World War II: Analyzing the Role of Technological Progress on the Formation of Households," IZA Discussion Papers 3313, Institute for the Study of Labor (IZA).
  2. Jeremy Greenwood & Ananth Seshadri & Mehmet Yorukoglu, 2003. "Engines of Liberation," RCER Working Papers 503, University of Rochester - Center for Economic Research (RCER).
  3. Fatih Guvenen & Burhanettin Kuruscu, 2010. "A Quantitative Analysis of the Evolution of the U.S. Wage Distribution, 1970-2000," NBER Chapters, in: NBER Macroeconomics Annual 2009, Volume 24, pages 227-276 National Bureau of Economic Research, Inc.
  4. Michelle Rendall, 2010. "Brain versus brawn: the realization of women's comparative advantage," IEW - Working Papers 491, Institute for Empirical Research in Economics - University of Zurich.
  5. Rupert, Peter & Rogerson, Richard & Wright, Randall, 1995. "Estimating Substitution Elasticities in Household Production Models," Economic Theory, Springer, vol. 6(1), pages 179-93, June.
  6. Stefania Albanesi & Claudia Olivetti, 2007. "Gender Roles and Technological Progress," Discussion Papers 0607-12, Columbia University, Department of Economics.
  7. Richard Rogerson, 2007. "Structural Transformation and the Deterioration of European Labor Market Outcomes," NBER Working Papers 12889, National Bureau of Economic Research, Inc.
  8. Todd Schoellman, 2010. "The Occupations and Human Capital of U.S. Immigrants," Journal of Human Capital, University of Chicago Press, vol. 4(1), pages 1-34.
  9. Lawrence F. Katz & Kevin M. Murphy, 1991. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," NBER Working Papers 3927, National Bureau of Economic Research, Inc.
  10. Richard Rogerson, 2007. "Taxation and Market Work: Is Scandinavia an Outlier?," NBER Working Papers 12890, National Bureau of Economic Research, Inc.
  11. Ingram, Beth F. & Neumann, George R., 2006. "The returns to skill," Labour Economics, Elsevier, vol. 13(1), pages 35-59, February.
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Cited by:
  1. Claudia Olivetti, 2013. "The Female Labor Force and Long-run Development: The American Experience in Comparative Perspective," NBER Working Papers 19131, National Bureau of Economic Research, Inc.
  2. Du Rietz, Gunnar & Henrekson, Magnus & Waldenström, Daniel, 2012. "The Swedish Inheritance and Gift Taxation, 1885–2004," Working Paper Series 2012:18, Uppsala University, Department of Economics.
  3. Richard Rogerson & Akos Valentinyi & Berthold Herrendorf, 2007. "Growth and Structural Transformation," 2007 Meeting Papers 757, Society for Economic Dynamics.
  4. Rendall, Michelle, 2013. "Structural Change in Developing Countries: Has it Decreased Gender Inequality?," World Development, Elsevier, vol. 45(C), pages 1-16.
  5. Chakraborty, Indraneel & Stepanchuk, Serhiy & Holter, Hans A., 2012. "Marriage Stability, Taxation and Aggregate Labor Supply in the U.S. vs. Europe," Working Paper Series 2012:10, Uppsala University, Department of Economics.
  6. L. Rachel Ngai & Barbara Petrongolo, 2013. "Gender Gaps and the Rise of the Service Economy," CEP Discussion Papers dp1204, Centre for Economic Performance, LSE.
  7. L. Rachel Ngai & Barbara Petrongolo, 2013. "Gender gaps and the rise of the service economy," LSE Research Online Documents on Economics 51538, London School of Economics and Political Science, LSE Library.
  8. Ngai, L. Rachel & Petrongolo, Barbara, 2014. "Gender Gaps and the Rise of the Service Economy," IZA Discussion Papers 8134, Institute for the Study of Labor (IZA).
  9. Aysegul Sahin & Stefania Albanesi, 2013. "Jobless Recoveries and Gender Biased Technological Change," 2013 Meeting Papers 985, Society for Economic Dynamics.
  10. Claudia Olivetti & Barbara Petrongolo, . "Gender gaps across countries and skills: Demand, supply and the industry structure," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics.

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