Working Paper: NBER ID: w25655
Authors: Stefania Albanesi
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.
Keywords: female labor supply; productivity growth; business cycles; jobless recoveries; economic performance
JEL Codes: E17; E27; E32; E37; J21; J3; J82
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Growth in women's labor supply (J29) | TFP growth (O49) |
| Growth in women's labor supply (J29) | Average labor productivity growth (O49) |
| Lower cyclicality of female hours (J29) | Reduced cyclicality of aggregate hours (J29) |
| Growth in female labor supply (J21) | Economic performance (output growth and male wages) during expansions (E24) |
| Cessation of growth in female labor supply (J26) | Jobless recoveries post-recession (J64) |
| Changing behavior of female hours (J29) | Sluggish recovery in employment and hours following recessions (E24) |