Women Prefer Larger Governments: Growth, Structural Transformation, And Government Size
The increase in income per capita is accompanied, in virtually all countries, by two changes in the structure of the economy, namely an increase in the share of government spending in GDP and an increase in female labour force participation. This paper suggests that these two changes are causally related. We develop a growth model where the structure of the economy is endogenous so that participation in market activities and government size are causally related. Economic growth and rising incomes are accompanied by a greater incentive for women to engage in labour market activities as the opportunity cost of staying at home increases. We hypothesize that government spending decreases the cost of performing household chores such as, but not limited to, child rearing and child care so that couples decide to engage further in the labour market and chose a higher tax rate to finance more government spending. Using a wide cross-section of data for developed and developing countries, we show that higher participation by women in the labour market are indeed positively associated with larger governments. Furthermore, we investigate the causal link between the two variables using as instrumental variables a unique and novel dataset on the relative price of home appliances across OECD countries and over time. We find strong evidence of a causal link between participation in the labour market and government size: a 10 percent rise in participation in the labour market leads to a 7 to 8 percent rise in government size. This effect is robust to the country sample, time period, and a set of controls in the spirit of Rodrik (1998). The inclusion of an endogenous choice of government spending allows a considerable extension of the model in Galor and Weil (2000) so fertility can either rise or fall and phenomena like the baby boom and baby bust in Greenwood at el. (2002) can be addressed. In addition, the paper has important implications for the analysis of the secular as well as c
(This abstract was borrowed from another version of this item.)
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 49 (2011)
Issue (Month): 1 (01)
|Contact details of provider:|| Postal: |
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0095-2583
More information through EDIRC
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0095-2583|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Claudia Goldin, 1990.
"Understanding the Gender Gap: An Economic History of American Women,"
National Bureau of Economic Research, Inc, number gold90-1, June.
- Goldin, Claudia, 1992. "Understanding the Gender Gap: An Economic History of American Women," OUP Catalogue, Oxford University Press, number 9780195072709, March.
- repec:cup:cbooks:9780521662918 is not listed on IDEAS
- Fernández, Raquel & Fogli, Alessandra & Olivetti, Claudia, 2002.
"Marrying Your Mom: Preference Transmission and Women's Labour and Education Choices,"
CEPR Discussion Papers
3592, C.E.P.R. Discussion Papers.
- Raquel Fernandez & Alessandra Fogli & Claudia Olivetti, 2002. "Marrying Your Mom: Preference Transmission and Women's Labor and Education Choices," NBER Working Papers 9234, National Bureau of Economic Research, Inc.
- Galor, Oded & Weil, David, 1995.
"The Gender Gap, Fertility and Growth,"
CEPR Discussion Papers
1157, C.E.P.R. Discussion Papers.
- Weichselbaumer, Doris & Winter-Ebmer, Rudolf, 2003.
"A Meta-Analysis of the International Gender Wage Gap,"
IZA Discussion Papers
906, Institute for the Study of Labor (IZA).
- Doris Weichselbaumer & Rudolf Winter-Ebmer, 2005. "A Meta-Analysis of the International Gender Wage Gap," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 479-511, 07.
- Weichselbaumer, Doris & Winter-Ebmer, Rudolf, 2003. "A Meta-Analysis of the International Gender Wage Gap," Economics Series 143, Institute for Advanced Studies.
- Weichselbaumer, Doris & Winter-Ebmer, Rudolf, 2003. "A Meta-Analysis of the International Gender Wage Gap," CEPR Discussion Papers 4127, C.E.P.R. Discussion Papers.
- Doris Weichselbaumer & Rudolf Winter-Ebmer, 2003. "A meta-analysis of the international gender wage gap," Economics working papers 2003-11, Department of Economics, Johannes Kepler University Linz, Austria.
- Greenwood, Jeremy & Seshadri, Ananth, 2005.
"Technological Progress and Economic Transformation,"
Handbook of Economic Growth,
in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 19, pages 1225-1273
- Jeremy Greenwood & Ananth Seshadri, 2004. "Technological Progress and Economic Transformation," NBER Working Papers 10765, National Bureau of Economic Research, Inc.
- Jeremy Greenwood & Ananth Seshadri, 2002. "Technological Progress and Economic Transformation," Economie d'Avant Garde Research Reports 3, Economie d'Avant Garde.
- Jeremy Greenwood & Ananth Seshadri & Guillaume Vandenbroucke, 2002.
"The Baby Boom and Baby Bust,"
Economie d'Avant Garde Research Reports
1, Economie d'Avant Garde.
- Iván Fernández Val, 2003. "Household labor supply: evidence for Spain," Investigaciones Economicas, Fundación SEPI, vol. 27(2), pages 239-275, May.
- David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
- Jonah B. Gelbach, 2002. "Public Schooling for Young Children and Maternal Labor Supply," American Economic Review, American Economic Association, vol. 92(1), pages 307-322, March.
- Husted, Thomas A & Kenny, Lawrence W, 1997. "The Effect of the Expansion of the Voting Franchise on the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 54-82, February.
- Jeremy Greenwood & Ananth Seshadri & Guillaume Vandenbroucke, 2002. "The baby boom and baby bust: some macroeconomics for population economics," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
- Jeremy Greenwood & Ananth Seshadri & Mehmet Yorukoglu, 2003.
"Engines of Liberation,"
RCER Working Papers
503, University of Rochester - Center for Economic Research (RCER).
- Sherwin Rosen, 1996. "Public Employment and the Welfare State in Sweden," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 729-740, June.
- Florence Jaumotte, 2003. "Female Labour Force Participation: Past Trends and Main Determinants in OECD Countries," OECD Economics Department Working Papers 376, OECD Publishing.
When requesting a correction, please mention this item's handle: RePEc:bla:ecinqu:v:49:y:2011:i:1:p:155-171. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.