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The Service Sector and Female Market Work: Europe vs US

  • Michelle Rendall

    (University of Zurich)

Aggregate market hours differ dramatically across OECD countries. However, disaggregated by sex differences in market hours do not necessarily match aggregate market hour differences. Continental Europe has seen a smaller rise in formal female employment compared with the United States or Scandinavia. Additionally, Continental Europe has a substantially smaller service sector. These facts coincide with job requirements shifting from physical strength to intellectual abilities. This paper gives empirical evidence on why women predominately work in the service sector. Given the empirical evidence, a model where technical change favoring women, by increasing the service sector, drives female employment is developed. The key is households can produce a substitute for market services and women are, on average, less productive in sectors requiring more brawn, giving them a comparative advantage with respect to staying home and working in the service sector. Therefore, an economy that does not facilitate the movement of women into the labor market, by imposing high taxes, causes service production to remain at home. This reduces the demand for market services, which feeds back into low total hours worked by women (and the total economy). Subsidies to female employment can circumvent the high tax effect, but will lead to welfare loses.

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Paper provided by Society for Economic Dynamics in its series 2011 Meeting Papers with number 778.

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Date of creation: 2011
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Handle: RePEc:red:sed011:778
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  3. Michelle Rendall, 2010. "Brain versus Brawn: The Realization of Women's Comparative Advantage," 2010 Meeting Papers 926, Society for Economic Dynamics.
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  9. Claudia Olivetti, 2005. "Changes in Women's Hours of Market Work: The Role of Returns to Experience," Boston University - Department of Economics - Macroeconomics Working Papers Series WP2005-008, Boston University - Department of Economics, revised Jun 2006.
  10. Fatih Guvenen & Burhanettin Kuruscu, 2007. "A Quantitative Analysis of the Evolution of the U.S. Wage Distribution: 1970-2000," NBER Working Papers 13095, National Bureau of Economic Research, Inc.
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