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Changing Business Cycles: The Role of Women’s Employment

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  • Stefania Albanesi

    () (University of Pittsburgh)

Abstract

This paper studies the impact of changing trends in female labor supply on productivity, TFP growth and aggregate business cycles. We find that the growth in women’s labor supply and relative productivity added substantially to TFP growth 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 can account for a large fraction of the reduced 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 starting in the 1990s played a substantial role in the jobless recoveries following the 1990-1991, 2001 and 2007-2009 recessions. Moreover, it depressed aggregate hours, output growth and male wages during the late 1990s and mid 2000s expansions. These results suggest that continued growth in female employment since the early 1990s would have significantly improved economic performance in the United States.

Suggested Citation

  • Stefania Albanesi, 2019. "Changing Business Cycles: The Role of Women’s Employment," Working Papers 2019-021, Human Capital and Economic Opportunity Working Group.
  • Handle: RePEc:hka:wpaper:2019-021
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    File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/Albanesi_2019_changing-business-cycles.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    female employment; business cycles; productivity slowdown; great moderation; jobless recoveries;

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - 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
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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