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Inequality and Household Labor Supply

Author

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  • Maria J. Prados

    (Columbia University)

  • Stefania Albanesi

    (Columbia University)

Abstract

This paper accounts for the decline in the labor force participation of married women in the US since 1995. We first document that this phenomenon is mainly driven by a decline in participation of college women married to high earning men. We argue that the rise in skill premium and especially the rise in wages for highly qualified workers is a factor in this phenomenon. We develop a household model of labor supply in which the rise in wages for highly skilled male workers, in conjunction with the gender gap in wages, generates a negative wealth effect that discourages participation and reduces hours for their spouses. A version of the model that incorporates on the job learning/training endogenously generates the rise in gender wage gaps for high skill workers, which is also consistent with the US experience post 1995.

Suggested Citation

  • Maria J. Prados & Stefania Albanesi, 2011. "Inequality and Household Labor Supply," 2011 Meeting Papers 657, Society for Economic Dynamics.
    • Handle: RePEc:red:sed011:657
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    References listed on IDEAS

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    1. Claudia Goldin & Lawrence F. Katz & Ilyana Kuziemko, 2006. "The Homecoming of American College Women: The Reversal of the College Gender Gap," Journal of Economic Perspectives, American Economic Association, vol. 20(4), pages 133-156, Fall.
    2. Thomas Lemieux & W. Bentley MacLeod & Daniel Parent, 2009. "Performance Pay and Wage Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(1), pages 1-49.
    3. Garey Ramey & Valerie A. Ramey, 2010. "The Rug Rat Race," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 41(1 (Spring), pages 129-199.
    4. Claudia Goldin, 2006. "The Quiet Revolution That Transformed Women's Employment, Education, and Family," American Economic Review, American Economic Association, vol. 96(2), pages 1-21, May.
    5. Jonathan Heathcote & Kjetil Storesletten & Giovanni L. Violante, 2010. "The Macroeconomic Implications of Rising Wage Inequality in the United States," Journal of Political Economy, University of Chicago Press, vol. 118(4), pages 681-722, August.
    6. Goldin, Claudia, 2006. "The Quiet Revolution That Transformed Women’s Employment, Education, and Family," Scholarly Articles 2943933, Harvard University Department of Economics.
    7. Chinhui Juhn & Sandra E. Black, 2000. "The Rise of Female Professionals: Are Women Responding to Skill Demand?," American Economic Review, American Economic Association, vol. 90(2), pages 450-455, May.
    8. Mark Aguiar & Erik Hurst, 2007. "Measuring Trends in Leisure: The Allocation of Time Over Five Decades," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 969-1006.
    9. Stefania Albanesi & Claudia Olivetti, 2009. "Production, Market Production and the Gender Wage Gap: Incentives and Expectations," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 80-107, January.
    10. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-467, June.
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    Cited by:

    1. Stefania Albanesi & Aysegul Sahin, 2018. "The Gender Unemployment Gap," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 30, pages 47-67, October.
    2. Stefania Albanesi, 2019. "Changing Business Cycles: The Role of Women's Employment," Working Papers 2019-021, Human Capital and Economic Opportunity Working Group.
    3. Stefania Albanesi, 2017. "Changing Business Cycle Dynamics in the US: The Role of Women's Employment," 2017 Meeting Papers 580, Society for Economic Dynamics.
    4. Aysegul Sahin & Stefania Albanesi, 2013. "Jobless Recoveries and Gender Biased Technological Change," 2013 Meeting Papers 985, Society for Economic Dynamics.
    5. repec:hka:wpaper:2013-04 is not listed on IDEAS

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