Lecture 2: Quiet Revolution~ Female Labor Force Participation & Economic Development

TOPIC 1: Claudia Goldin’s Quiet Revolution

Purpose of the paper

Looks across the late 19th century to the modern day to analyze key factors that influenced women as economic agents.

5 phases of Female Labor Force Participation

1) Independent Female Worker (1870-1920)

2) Easing the Constraints (1930-1950)

3) Roots to Revolution (1950-1970)

4) Quiet Revolution (1970s-2000s)

Phase 1- The independent Female Workers- Key Characteristic~

• 1870-1920

• Women could work if unmarried but faced marriage bars.

• Domestic help, service, and manufacturing jobs were available, but wives faced stigma when working outside the home.

• LFP: 15-22% driven by a decrease in fertility and an increase in education.

Phase 2- Easing the Constraints- Key Characteristic~

• 1930-1950

• marriage bars eliminated

• office jobs, clerical work, and part time jobs were available.

• LFP (married): 10% to 25%, HS enrollment increased, increase in demand for women due to vacancy left in workforce by men fighting in WW2 (1939-45), introduction of washing machine and dryer freed up women’s time.

Phase 3- Roots to Revolution- Key Characteristic~

• 1950-1970

• Many women thought they would enter the workforce temporarily but ended up staying in it.

• “pink collar” jobs available: secretaries, nurses, teachers, social workers, librarians.

• LFP: 25 to 46% driven by women’s human capital increasing (college enrollment up).

Phase 4-Quiet Revolution- Key Characteristics~

• Occupational convergence: women became doctors, layers and managers.

• employment expectation up!

• LFP (mothers): 20% to 62% driven by college graduation and professional degree attainment.

TOPIC 2: Claudia Goldin’s U-Shaped Model of Female Labor Force Participation

Purpose of Paper

Goldin argues that if you look at the LFP of women across countries as a function of income (measured as GDP per capita), this relationship is U-shaped instead of linear.

Assumptions of paper~ based on Becker Model Assumptions (4)

1) Competitive Labor Market- workers receive a wage that is exactly equal to the value of their marginal productivity. (W= P x MPL)

2) Frictionless Mobility- assumes frictionless mobility in and out of the workforce (skills do not deteriorate with long abbesses from work.

3) Childcare (C)- must be produced at home (no institutional childcare).

4) One Good (G)- produced at home (all periods), or produced by the firm (period 2 & 3).

Mathematical function for U-shaped model (with and without stigma)

• u = (G, C)

• Stigma (S) applies if women had blue-collar jobs (time period 2 and time period 3)

  • Stigma applies to the utility function in the following way: u = u(G, C)- ∂S, S=1 if blue-collar, S=0 otherwise.

Time periods within the U-Shaped model (description + graph)

• Period 1- agriculture/ home production only.

• Period 2- manufacturing firm is added (blue-collar).

• Period 3- education & white-collar jobs added.

Income effect

• Change in wife’s labor supply associated with a change in family income, holding wages constant.

• ∆ Hours of Work/ ∆ Y (income) I w̄ < 0

• IE is typically negative.

Substitution Effect

• Change in wife’s labor supply associated with a change in wage, holding income constant.

• ∆ Hours of Work/ ∆ W (wage) I Ȳ > 0

• typically positive

Production Possibility Frontier (Beckers Model)

• PPF- feasible combinations of ways time can be allocated. Y axis = G, X axis= T

Why is PPF Concave?

• The longer you do one task the less productive you become at it (diminishing returns).

The U-shaped model conceptualized through the PPF