Changes in the Labor Supply Behavior of Married Women: 1980-2000

Changes in the Labor Supply Behavior of Married Women: 1980-2000

March 2005 | Francine D. Blau, Lawrence M. Kahn
This paper investigates changes in the labor supply behavior of married women in the United States from 1980 to 2000 using March Current Population Survey (CPS) data. The authors find that married women's labor supply function shifted sharply to the right in the 1980s, leading to a more rapid growth in female labor supply compared to the 1990s. This shift was primarily driven by an increase in women's own wages, which rose by about 12% in the 1980s and 17-20% in the 1990s. Additionally, there was a significant reduction in women's wage elasticities, both for their own wages and their husbands' wages, over the two decades. The wage elasticity of women's labor supply fell from about 0.8 to 0.6 in the 1980s and from 0.6 to 0.4 in the 1990s. These findings suggest that government policies affecting marginal wage rates, such as income taxes, have a smaller impact on the economy now than in the past. The paper also examines the role of non-labor income, demographic factors, and the changing family context in influencing women's labor supply decisions.This paper investigates changes in the labor supply behavior of married women in the United States from 1980 to 2000 using March Current Population Survey (CPS) data. The authors find that married women's labor supply function shifted sharply to the right in the 1980s, leading to a more rapid growth in female labor supply compared to the 1990s. This shift was primarily driven by an increase in women's own wages, which rose by about 12% in the 1980s and 17-20% in the 1990s. Additionally, there was a significant reduction in women's wage elasticities, both for their own wages and their husbands' wages, over the two decades. The wage elasticity of women's labor supply fell from about 0.8 to 0.6 in the 1980s and from 0.6 to 0.4 in the 1990s. These findings suggest that government policies affecting marginal wage rates, such as income taxes, have a smaller impact on the economy now than in the past. The paper also examines the role of non-labor income, demographic factors, and the changing family context in influencing women's labor supply decisions.
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