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Changing Business Cycles: The Role of Women's Employment

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  • Albanesi, Stefania

Abstract

This paper builds a real DSGE model with gender differences in labor supply and productivity. The model is used to assess the impact of changing trends in female labor supply on productivity and TFP growth and aggregate business cycles. We find that the growth in women's labor supply and relative productivity contributed substantially to TFP growth starting from the early 1980s, even if it depressed average labor productivity growth, contributing to the 1970s productivity slowdown. We also show that the lower cyclicality of female hours and their growing share in aggregate hours is able to account for a large fraction of the decline in the cyclicality of aggregate hours during the great moderation, as well as the decline in the correlation between average labor productivity and hours. Finally, we show that the discontinued growth in female labor supply after the 1990s played a substantial role in the jobless recoveries following the 2001 and 2007-2009 recession. Moreover, it also depressed aggregate hours and output growth during the late 1990s and mid 2000s expansions and it reduced male wages. These results suggest that continued growth in female hours since the early 1990s would have significantly improved economic performance in the United States.

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  • Albanesi, Stefania, 2019. "Changing Business Cycles: The Role of Women's Employment," CEPR Discussion Papers 13578, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:13578
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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Guisinger, Amy Y., 2020. "Gender differences in the volatility of work hours and labor demand," Journal of Macroeconomics, Elsevier, vol. 66(C).
    2. Kim, Jiyeon, 2021. "Searching for the Cause of the Gender Gap in Employment Losses during the COVID-19 Crisis," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 43(2), pages 53-79.
    3. Masao Fukui & Emi Nakamura & Jón Steinsson, 2023. "Women, Wealth Effects, and Slow Recoveries," American Economic Journal: Macroeconomics, American Economic Association, vol. 15(1), pages 269-313, January.
    4. Matías Ciaschi, 2020. "Job loss and household labor supply adjustments in developing countries: Evidence from Argentina," CEDLAS, Working Papers 0271, CEDLAS, Universidad Nacional de La Plata.
    5. Henrique S. Basso & Omar Rachedi, 2021. "The Young, the Old, and the Government: Demographics and Fiscal Multipliers," American Economic Journal: Macroeconomics, American Economic Association, vol. 13(4), pages 110-141, October.
    6. Carta, Francesca & De Philippis, Marta, 2020. "Comments on “labor market trends and the changing value of time”," Journal of Economic Dynamics and Control, Elsevier, vol. 115(C).
    7. Guner, Nezih & Kulikova, Yuliya & Valladares-Esteban, Arnau, 2020. "Does the Added Worker Effect Matter?," IZA Discussion Papers 12923, Institute of Labor Economics (IZA).
    8. Stefania Albanesi & Maria Jose Prados, 2022. "Slowing Women’s Labor Force Participation: The Role of Income Inequality," Working Papers 2022-037, Human Capital and Economic Opportunity Working Group.
    9. Campos-Vazquez, Raymundo M. & Esquivel, Gerardo & Ghosh, Priyasmita & Medina-Cortina, Eduardo, 2023. "Long-lasting effects of a depressed labor market: Evidence from Mexico after the great recession," Labour Economics, Elsevier, vol. 81(C).
    10. Neyer, Ulrike & Stempel, Daniel, 2021. "Gender discrimination, inflation, and the business cycle," Journal of Macroeconomics, Elsevier, vol. 70(C).
    11. Ines Buono & Annalivia Polselli, 2022. "An international map of gender gaps," Questioni di Economia e Finanza (Occasional Papers) 714, Bank of Italy, Economic Research and International Relations Area.
    12. Maria Jose Luengo-Prado, 2021. "COVID-19 and the Labor Market Outcomes for Prime-Aged Women," Current Policy Perspectives 90899, Federal Reserve Bank of Boston.
    13. Asiimire Donath & Gertrude Fester & Medard Twinamatsiko & Benard Nuwatuhaire, 2021. "Women’s employment and the changing family pattern in Ankole Sub-region- Uganda," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 5(12), pages 323-335, December.

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    More about this item

    Keywords

    Female employment; Business cycles; Great moderation; Productivity slowdown; Jobless recoveries;
    All these keywords.

    JEL classification:

    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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