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Evolution of the Female Labour Force Participation Rate in Canada, 1976-1994: a Cohort Analysis

In: A Symposium on Canadian Labour Force Participation in the 1990s (Special Issue of Canadian Business Economics, Volume 7, Number 2, May 1999)

Author

Listed:
  • Paul Beaudry
  • Thomas Lemieux

Abstract

The participation rate of women aged 25-64 rose greatly in the 1970s and 1980s, but has stagnated in the 1990s. In principle, this development could reflect either the poor growth performance of the economy this decade or the completion of the integration of women into the labour force. In the fourth article of this symposium, Paul Beaudry and Thomas Lemieux use a cohort analysis to shed light on the explanation of this stagnation in female labour force participation. Using data from the Survey of Consumer Finances for the 1976-94 period, the authors track the participation rates over time of representative groups of women who entered the labour force at different points in time. They decompose a cohort’s participation rate into three effects: a macroeconomic effect common across cohorts linked to factors such as recessions and employment insurance generosity; an age or life-cycle effect; and a cohort-specific effect which shows the differences between cohorts for a given age and macroeconomic effect. The authors find that the cohort effects are likely the dominant factor in explaining the recent stagnation of female participation, just as it explained the large increases in the 1970s and 1980s. The recession of the early 1990s, which according to the authors reduced the female participation rate by 1 percentage point, merely amplified the stagnation phenomenon. As the cohort effects stabilize with the narrowing of the gap between male and female participation rates, the stagnation would have occurred, albeit later in the 1990s, even if more favourable macroeconomic conditions had prevailed. The authors conclude that there is still room for a 2-3 percentage point increase in the participation rate of women 25-64, but the magnitude of the increases of the 1970s and 1980s is not possible as the cohort effects that prevailed then no longer exist. The authors stress that their results are dependent on the amount of flexibility used to capture the cohort effect so that the age profile and its slope can trace both the rise and the flattening of the participation rate by age. They point out that over time participation behaviour of women 25-64 is converging toward that of men, namely, high and flat participation profiles to at least age 55. They also note that the much smaller increase in the female participation rate in the United States in the 1990s relative to the 1970s and 1980s despite the robust U.S. labour market supports their findings as the cohort effects were also levelling out south of the border.

Suggested Citation

  • Paul Beaudry & Thomas Lemieux, 1999. "Evolution of the Female Labour Force Participation Rate in Canada, 1976-1994: a Cohort Analysis," A Symposium on Canadian Labour Force Participation in the 1990s (Special Issue of Canadian Business Economics, Volume 7, Number 2, May 1999),in: Andrew Sharpe & Louis Grignon (ed.), A Symposium on Canadian Labour Force Participation in the 1990s (Special Issue of Canadian Business Economics, Volume 7, Number 2, May 1999), pages 57-70 Centre for the Study of Living Standards.
  • Handle: RePEc:sls:lfpcbe:05
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    File URL: http://www.csls.ca/journals/simp/simp05.pdf
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    References listed on IDEAS

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    1. David Card & W. Craig Riddell, 1993. "A Comparative Analysis of Unemployment in Canada and the United States," NBER Chapters,in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 149-190 National Bureau of Economic Research, Inc.
    2. Paul Beaudry & David A. Green, 2000. "Cohort patterns in Canadian earnings: assessing the role of skill premia in inequality trends," Canadian Journal of Economics, Canadian Economics Association, vol. 33(4), pages 907-936, November.
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    Citations

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    Cited by:

    1. Robert Duval Hernández & Pedro Orraca, 2008. "A Cohort Analysis of Labor Participation in Mexico, 1987-2008," Working papers DTE 440, CIDE, División de Economía.
    2. Duval Hernández, Robert & Orraca Romano, Pedro, 2009. "A Cohort Analysis of Labor Participation in Mexico, 1987-2009," IZA Discussion Papers 4371, Institute for the Study of Labor (IZA).
    3. Brodeur, Abel & Connolly, Marie, 2013. "Do higher child care subsidies improve parental well-being? Evidence from Quebec's family policies," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 1-16.
    4. Tammy Schirle, 2008. "Why Have the Labor Force Participation Rates of Older Men Increased since the Mid-1990s?," Journal of Labor Economics, University of Chicago Press, vol. 26(4), pages 549-594, October.
    5. David Black & Yi-Ping Tseng & Roger Wilkins, 2010. "The Decline In Male Employment In Australia: A Cohort Analysis," Australian Economic Papers, Wiley Blackwell, vol. 49(3), pages 180-199, September.
    6. Kadija Charni, 2016. "Is it Better to Work When We Are Older? An Empirical Comparison Between France and Great Britain," Working Papers halshs-01393268, HAL.
    7. Ross Richardson & Lia Pacelli & Ambra Poggi & Matteo Richiardi, 2018. "Female Labour Force Projections Using Microsimulation for Six EU Countries," International Journal of Microsimulation, International Microsimulation Association, vol. 11(2), pages 5-51.
    8. Mario Fortin & Pierre Fortin, 1999. "The Changing Labour Force Participation of Canadians, 1969-96: Evidence from a Panel of Six Demographic Groups," A Symposium on Canadian Labour Force Participation in the 1990s (Special Issue of Canadian Business Economics, Volume 7, Number 2, May 1999),in: Andrew Sharpe & Louis Grignon (ed.), A Symposium on Canadian Labour Force Participation in the 1990s (Special Issue of Canadian Business Economics, Volume 7, Number 2, May 1999), pages 12-24 Centre for the Study of Living Standards.
    9. Almut Balleer & Ramon Gomez-Salvador & Jarkko Turunen, 2014. "Labour force participation across Europe: a cohort-based analysis," Empirical Economics, Springer, vol. 46(4), pages 1385-1415, June.

    More about this item

    Keywords

    Canada; Labour Force Participation; Labor Force Participation; Participation Rate; Labour Force Participation Rate; Labor Force Participation Rate; Age Structure; Age; Sex; Gender; Aging; Ageing; Women;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

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