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The U-Shaped Female Labor Force Function in Economic Development and Economic History

  • Claudia Goldin

The labor force participation rate of married women first declines and then rises as countries develop. Its þ-shape is revealed both across the process of economic development and through the histories of currently advanced countries. The initial decline in the participation rate is due to the movement of production from the household, family farm, and small business to the wider market, and to a strong income effect. But the income effect weakens and the substitution effect strengthens at some point. This paper explores why the change takes place and why the þ-shape is traced out. When women are poorly educated their only wage labor outside the home and family is in manual work, against which a strong social stigma exists. But when women are educated, particularly at the secondary level, they enter white-collar work, against which no social stigma exists. Data for more than one-hundred countries and for United States history are used to explore the hypothesis of the þ-shaped female labor force function.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4707.

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Date of creation: Apr 1994
Date of revision:
Publication status: published as T. Paul Schultz, ed., Investment in Women's Human Capital and Economic Development, University of Chicago Press, 1995.
Handle: RePEc:nbr:nberwo:4707
Note: DAE
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  1. Thomas, D., 1989. "Intra-Household Resource Allocation: An Inferential Approach," Papers 586, Yale - Economic Growth Center.
  2. Claudia Goldin, 1990. "Understanding the Gender Gap: An Economic History of American Women," NBER Books, National Bureau of Economic Research, Inc, number gold90-1, December.
  3. Miller, Barbara D, 1982. "Female Labor Participation and Female Seclusion in Rural India: A Regional View," Economic Development and Cultural Change, University of Chicago Press, vol. 30(4), pages 777-94, July.
  4. Gronau, Reuben, 1977. "Leisure, Home Production, and Work-The Theory of the Allocation of Time Revisited," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1099-1123, December.
  5. Schultz, T.P., 1991. "International Differences in Labor Force Participation in Families and Firms," Papers 634, Yale - Economic Growth Center.
  6. Schultz, T.P., 1989. "Women'S Changing Participation In The Labor Force: A World Perspective," Papers 571, Yale - Economic Growth Center.
  7. Barro, Robert J. & Lee, Jong-Wha, 1993. "International comparisons of educational attainment," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 363-394, December.
  8. Norris, Mary E., 1992. "The impact of development on women : A specific-factors analysis," Journal of Development Economics, Elsevier, vol. 38(1), pages 183-201, January.
  9. Psacharopoulos, George & Tzannatos, Zafiris, 1989. "Female Labor Force Participation: An International Perspective," World Bank Research Observer, World Bank Group, vol. 4(2), pages 187-201, July.
  10. Mukhopadhyay, S.K., 1991. "Adapting Household Behavior to Agricultural Technology in West Bengal, India: Wage labor, Fertility; and Child Schooling Determinants," Papers 631, Yale - Economic Growth Center.
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