Slowing Women s Labor Force Participation: The Role of Income Inequality

Transcription

1 Slowing Womn s Labor Forc Participation: Th Rol of Incom Inquality Stfania Albansi, Univrsity of Pittsburgh María José Praos, USC ESSIM in Tarragona - May 24-26, / 61

2 Trns in LFP an Wags Slowing fmal participation an convrgnc in wags sinc th mi-1990s in th US. Gnr Wag Gap an Fmal LFP, marri workrs Gnr wag gap Yar Fmal labor forc participation rat Gnr wag gap Fmal labor forc participation rat Gnr wag gap is comput as man wag of mal workrs ovr man wag of fmal workrs for full tim, full yar workrs Th valus ar thr yar moving avrags. Sourc: March Supplmnt of CPS 2 / 61

3 Trns in LFP an Wags Skill prmium by sx Growth in th skill prmium acclrat for mn an slow for womn sinc th mi-1990s, rsulting in growing ivrgnc. 90/50 prcntil ratio ros mor for mn than for womn ovr sam prio Earning Disprsion Skill Prmium Yar skill prmium mn/skill prmium womn Ratio of Mal to Fmal Skill Prmium all fulltim workrs Collg Prmium, Mals Prmium is comput as man wag of collg workrs ovr man wag of non collg workrs for full tim, full yar workrs Collg Prmium, Fmals Yar Rolling thr yars avrag Ratio of man hourly wags btwn workrs with collg gr an thos without a collg gr, for FT-FY workrs, rgarlss of marital status. Thr yar cntr moving avrags. Sourc: March Supplmnt of CPS 3 / 61

4 Hypothsis Ris in skill prmium can xplain th lack of convrgnc in participation an wags across gnrs sinc th arly 1990s. Mchanism: Ris in arnings for skill mn gnrats ngativ walth ffct on wivs participation an markt hours. Ruc attachmnt to th labor markt rucs xprinc an arnings for skill womn rlativ to skill mn. Positiv assortativ matching by ucation implis a larg ffct on skill womn, as wll as unskill womn marri to skill mn. Objctivs: Documnt mpirical vinc on participation an hours by ucation of husbans an wivs. Explor mchanism quantitativly, how much can it xplain? 4 / 61

5 Hypothsis Ris in skill prmium can xplain both th lack of convrgnc in participation an wags across gnrs sinc th arly 1990s. Prviw of finings: Mchanism can account for sizabl fraction of slowing growth in fmal participation in for womn marri to collg husbans. Mchanism can only partially rprouc th slowing convrgnc in fmal wags to mal wags in an th lowr growth in th skill prmium for womn. 5 / 61

6 Rlat Litratur Thory: Frnanz (2013), Fogli an Vlkamp (2011) Ris in fmal participation u to larning about costs for th houshol. S-shap as larning slows with most womn in th labor forc. Empirical: Blau an Kahn (2013) Intrnational comparison, lack of part tim an accss to aycar. Empirical: Fortin (2013) Rgrssion in attitus towars gnr rol in th 1990s. 6 / 61

7 Outlin Evinc Mol Quantitativ Analysis Ongoing work 7 / 61

8 Evinc

9 Data an Sampl CPS March Supplmnt, , an PSID, Aults ags 25 to 64. Marri (for most of th analysis). Labor forc participation fin as: working or looking for work at last 40 wks a yar. Skill (Collg) workrs hav complt four yar collg or post-grauat gr. Unskill (High School) hav complt high school an may hav som collg. 9 / 61

10 Skill Prmium Masuring th Phnomnon 2 Skill prmium, full 9m full yar workrs Skill prmium, mals Skill prmium, fmals Sourc: March Supplmnt of CPS Dash lin corrspons to linar trn for , in an out of sampl. 10 / 61

11 Skill Prmium Gnr Wag Gap by Eucation Th acclration in th mal skill prmium post-1991 is also associat with a ris in th gnr wag gap for skill workrs. Skill Prmium Mal/Fmal Wags Mal Fmal HS Coll Avrag Actual Projct Actual-Projct Actual-Projct% Sourc: Authors calculations from CPS. 11 / 61

12 Labor Forc Participation Comparison with mn Participation of marri mn has rmain mostly stabl. Mal LFP Labor forc participation rat Yar Marri womn Marri mn Sourc: PSID 12 / 61

13 Labor supply of womn Slowing of fmal participation rivn by marri womn. Labor forc participation of marri womn stopp catching up to othr groups. Labor forc participation rat Yar Marri womn Marri mn Singl womn Div/Sp womn Sourc: PSID 13 / 61

14 Labor Supply of Marri Womn Slowing in participation only for prim ag marri womn. LFP of marri womn by ag Labor Forc Participation Rat Yar y o y o y o y o Sourc: March Supplmnt of CPS 14 / 61

15 Labor supply of womn Participation of marri mn has rmain stabl. Slowing in fmal participation is rivn by marri womn. Participation of nvr marri womn rmain stabl (87% pr-1995, 86.5% ). Participation of ivorc or sparat womn rmain stabl (77.8% pr-1995, 77.3% ). Slowing in participation only for prim ag marri womn. Labor forc participation of marri womn stopp catching up to othr groups. 15 / 61

16 Masuring th Phnomnon Labor forc participation of marri womn Approach: Estimat probit mol for labor forc participation of marri womn in by own an husbans ucation. Controls for own an husban s ag. Us stimat paramtrs to projct fmal labor forc participation in Compar projct an actual sris. 16 / 61

17 Labor supply of womn Participation by own an husban s ucation High school husbans Collg Husbans Labor forc participation of womn marri to husb w/high school g Labor forc participation of womn marri to husb w/collg g Yar Yar Wif w/high sch. g. Wif w/collg g. Wif w/high sch. g. Wif w/collg g. Sourc: March Supplmnt of CPS Dash lin corrspons to projction from participation probit, in an out of sampl. 17 / 61

18 Masuring th Phnomnon: Labor Supply Participation by own an husban s ucation For , slowown in participation was largst for wivs with collg husbans. Marri Womn s Participation Houshol Typs (M-F) HS-HS C-HS HS-C C-C Avrag Actual Projct Actual-Projct Actual-Projct% Sourc: Authors calculations from CPS. 18 / 61

19 Labor supply of marri womn Rol of frtility Slowing of participation for both womn with an without chilrn. Suggsts frtility man not critical. Fmal participation rat by ucation matching no chilrn at last on chil fmal LF participation rats Yar NoCollg NoCollg Collg NoCollg NoCollg Collg Collg Collg Graphs by Wif s own chilrn in houshol Wif-husban ucation pairs. Sourc: March Supplmnt of CPS 19 / 61

20 Labor supply of marri womn Participation by husban s incom Diffrnc in projct an actual participation in is incrasing in husban s incom. Marri Womn LFP: Actual vs Projct % iffrnc Quintils of husban s arnings Sourc: March Supplmnt of CPS Diffrnc btwn projction an actual, bas on probit. Charts 20 / 61

21 Labor supply of marri womn Participation by husban s arnings Diffrnc in projct an actual participation in is incrasing in husban s incom. Suggsts rol of ngativ incom ffct. Marri Womn s Participation Aggrgat Husb <10% Husb 50% Husb> 90% Avrag Actual Projct Actual-Projct Actual-Projct% Sourc: Authors calculations from CPS. 21 / 61

22 Labor supply of marri womn Rol of frtility Slowing of participation for both womn with an without chilrn. Suggsts frtility man not critical. Fmal participation rat by husban s arnings prcntils no chilrn at last on chil fmal LF participation rats Graphs by Wif s own chilrn in houshol Yar 10 prcntil 50 prcntil 90 prcntil Sourc: March Supplmnt of CPS 22 / 61

23 Labor supply of marri womn Hours by ucation/husban s incom Pattrn in hours rflcts pattrn in participation Fmal Labor Markt Hours Yar Fmal Labor Markt Hours by husban s arnings prcntil Yar lss than collg, both h: lss than collg, w: collg h: collg, w: lss than collg collg, both husb. arn. in 10th prc husb. arn. in 90th prc husb. arn. in 50th prc Sourc: March Supplmnt of CPS 23 / 61

24 Ngativ Incom Effct Aitional Supporting Evinc Avrag husbans labor arnings significantly highr in on-arnr houshols. Ratio of husbans avrag wag in on-arnr ovr two-arnr houshols ros for collg husbans aftr 1993, clin for high school husbans. Strong ngativ ffct of husban s incom an collg gr on wivs participation. Ris in wif/husban wags for two arnr houshols in arly 1990s suggsting positiv slction of womn into participation. 24 / 61

25 Tabl 2: Snsitivity of fmal labor participation to husban s arnings brackt Ngativ Incom Effct Cof. St. Err. z P>z [95% Conf. Intrval] ag Avrag ucationhusbans yars labor arnings 81.97significantly highr in on-arnr gr houshols grxprc Ratio grxprc50 of husbans avrag wag in 0.00 on-arnr ovr two-arnr houshols grxprc75 ros for collg husbans aftr , clin for grxprc high school husbans. constant Tabl 3: Avrag wag of husban, by houshol typs On-arnr Two-arnr On-arnr hh/ Prio houshols houshols Two-arnr hh No Collg - No Collg % No Coll Husb - Coll Wif % Collg Husb - No Coll Wif % Collg - Collg % No Collg - No Collg % No Coll Husb - Coll Wif % Collg Husb - No Coll Wif % Collg - Collg % in on an two-arnr houshols Sourc: hav Authors bcomcalculations lss i rnt in from this CPS. last prio, whras collg gr mn in two arnr houshols ar furthr apart, in trms of arnings, from thos in on-arnr 25 / 61

26 Ngativ Incom Effct Strong ngativ ffct of husban s incom an collg gr. Wif s LFPR Cof. Robust St. Err. [95% Conf. Intrval] ag uc_yars (wif) collg (husban) prc prc prc prc collgxpr collgxpr~ collgxpr collgxpr constant Sourc: Authors calculations from CPS. 26 / 61

27 Intra-houshol inquality Wif/husban arnings ratio riss for collg wivs in arly 1990s, suggsting positiv slction Wif to husban arnings ratio Two arnr houshols whr husban has high school g. Wif to husban arnings ratio Two arnr houshols whr husban has collg g. avrag Y_f/Y_m avrag Y_f/Y_m Yar Yar Lss than collg wif Collg wif Lss than collg wif Collg wif Sourc: March CPS Ratio of wif to husban s arnings comput for houshols whr both partnrs work for at last 45 wks that yar, an ach arn at last $5,000 (in 2005 USD). 27 / 61

28 Ngativ Incom Effct Houshol Nt Worth Th corrsponing ris in nt worth for houshols with collg husban sinc th mi-1990s also contribut to th ngativ incom ffct. Thousan)ollars) 1,600" 1,400" 1,200" 1,000" 800" 600" 400" 200" 0" Nt"Worth"by"Houshol"Euca=on"Typ" 1989" 1992" 1995" 1998" 2001" 2004" 2007" 2010" C,"C" HS"wif,"C"husb" C"wif,"HS"husb" Hs,"HS" Man" : Survy of Consumr Financs Sourc: Survy of Consumr Financs. Figur 16: Houshol Nt Worth 28 / 61

29 Labor Flows Participation to non-participation (EN) flow rats incras, whil NE flow rats clin aftr 1995, spcially for womn with collg husbans. Wif-Husban Eucation Husban s Eucation All HS-HS HS-C C-HS C-C HS Coll EN NE Yarly transition rats. Sourc: Authors calculations from th PSID. 29 / 61

30 Labor Flows By houshol typ, prim ag womn Th ris in EN is mor pronounc for womn with collg husbans. Cor Prim E to N Flows by Houshol Typ Cor Prim N to E Flows by Houshol Typ Fraction Fraction Fraction 0.4 Fraction HS HS Collg HS HS Collg Collg Collg HS HS Collg HS HS Collg Collg Collg Sourc: Panl Stuy of Incom Dynamics; (Shaing rprsnts NBER Rcssions) Sourc: Panl Stuy of Incom Dynamics; (Shaing rprsnts NBER Rcssions) Yarly flows for Cor Prim womn (25-44 yo). Sourc: Authors calculations from th PSID. 30 / 61

31 Summary Skill prmium for mn riss by 6.3% in Mal/fmal wag ratio riss by 11% for collg workrs Labor forc participation of marri womn in rlativ to pr-1995 trn 12% lowr for collg womn 17% lowr for womn with collg husbans 25% lowr for womn with husbans in top incom cil Similar bhavior for hours Participation to Non-Participation flow riss, Non-Participation to Participation flow falls post 1995, spcially for womn with collg husbans. 31 / 61

32 Quantitativ Analysis

33 Mol Houshol Labor Supply Houshols: Compos by two marri partnrs of iffrnt gnr. Partnrs hav inpnnt utility functions. Marriag an ucational attainmnt xognous. No ivorc. Htrognity in iniviual prouctivity. Assortativ matching by ucation bas on mpirical istribution of houshol typs. Intnsiv an xtnsiv labor supply cisions. Efficint markt an hom hours allocation. Wags nognous u to on th job acquisition of human capital. 33 / 61

34 Mol Houshol Problm max c is j,h is j 0,lis s=f,m cis j ( J j {0,[l,l]},b j+1,kj+1 s 0 j=1 βj s=f,m λs u s.t. H j = G(h f j, h m j ) cj is, lj is + qbj+1 i s=f.m W j is lj is + bj i for j = 1, 2,...J s=f,m c is J b J k is j+1 = F (l is j, k is j ) k s 0 = k s H j givn for j = 1,.., J ) + hj is 34 / 61

35 Mol Wags an Human Capital Wags: W is j = θ s w s (1 + ξ s j is )k is j for s = f, m, i = c, hs, for all j = 1, 2,...J 1 fix iniviual prouctivity θ s, with gnr spcific istribution gnr spcific baslin wag w f w m skill prmium, ξ s j, inicator for collg is human capital law of motion follows Imai an Kan (2004), k i j = f (k i j 1, l i j 1 ) Enognous gnr wag gap an skill prmium u to on th job acquisition of human capital. 35 / 61

36 Mol Markt an Hom Hours Inivisibl labor: l is j = { 0 if p is l j = 0 if pj is = 1 Hom hours rquirmnt: H j = G(h f j, h m j ) Hj xognous, varis with ag j = 1, 2,...J 36 / 61

37 Optimal Houshol Allocation Incom ffcts: Participation is zro if own prouctivity is sufficintly low an non-labor incom (partnr s incom+walth) is sufficintly high. Ris in partnr s wag causs markt hours to rop an vntually participation to go to zro. Gnr wag gap causs wivs participation an markt hours to b lowr than husbans on avrag, triggring a clin in both, if th skill prmium riss. 37 / 61

38 Calibration Houshol typs (wif-husban): hs hs, hs coll, coll hs, coll coll Four stags: 25-39, 40-54, 55-69, 70+ yo Prouctivity istribution: θ s logn( θ, σ s ) for s = f, m, Stratgy: St most paramtrs bas on inpnnt vinc. St rmaining paramtrs to match 1980 aggrgat participation, labor arnings isprsion by gnr, hom/markt hours ratio. 38 / 61

39 Calibration Functional Forms Utility: u ( cj is, lj is ( + hj is ) = ) 1 σ cj is 1 σ φs ( l is j ) hj is γ s γ s σ, φ s, γ s > 0 for s = f, m Hom prouction: G(h f, h m ) = [ψ ( ) f h f ρ + ψ m (h m ) ρ] 1/ρ ρ, ψ s (0, 1) for s = f, m, s ψs = 1 39 / 61

40 Calibration Tabl: Paramtrs calibrat bas on inpnnt vinc Prfrncs σ = 1.1 β = λ f = 0.5 Hom prouction ψ f = 0.5 ρ = 0.65 {H 2, H 3} = {1.018, 1.031} H 1 Human capital Imai an Kan(2004) Labor markt w f /w m = 0.9, w m = 1 Lvl of ξ s back out of ata on wags an hours by ag. Distribution of houshol typs: from ata. 40 / 61

41 Calibration Tabl: Paramtrs calibrat for 1980 to match population momnts Utility Hom Prouction θ istribution φ f t φ m t H 1 σ m σ f Tabl: Data/Mol Comparison 1980 Data Mol Womn Mn Womn Mn Participation Coff. var. arnings istribution Markt/hom hours / 61

42 Exrcis 1: Stay stat ris in th skill prmium Exrcis: Back out ξj s to match actual avrag skill prmium by gnr using ata on wags an hours by ag. Compar 1980 to , as if stay stats. Labor supply rspons: larg rop in participation of womn with collg husbans, 60% of ata; larg rop in participation of womn in collg womn with collg husbans, 40% of ata; participation of collg womn with high school husbans riss, contrary to ata no rspons in participation of high school womn, by sign Qualitativly capturs largr incras in skill prmium for mn, an highr ris in mal/fmal wag ratio for collg than high school. 42 / 61

43 Exrcis 1 Rspons of womn s labor supply Dclin in participation in th mol gratst for womn with collg husbans, as in ata. Participation of collg womn with high school husbans riss, contrary to ata. Marri Womn s Participation Houshol Typs HS-HS HS-C C-HS C-C Mol 1980 calibration: skill prmium-actual prcnt chang Data Avrag : actual- pr1995 projction prcnt chang Wags 43 / 61

44 Exrcis 2: Cohort simulations Simulat mol vry 5 yars btwn 1965 an 2005, xamin bhavior of cohorts who ar in ach yar throughout thir liftim. Calibrat constant rat of clin in φ f to match participation growth btwn , projct forwar post Capturs forcs incrasing womn s labor supply. Exampls: Hom appliancs (Grnwoo, Shshari an Yorugoklu 2005), cultural factors (Fogli an Vlkamp 2011, Frnanz 2013), improvmnt in matrnal halth (Albansi an Olivtti 2016). Trns for w f /w m an w m as in ata. Skill prmium: : Stabl procss back out from ata : Nw procss back out from ata, with highr lvl an highr growth rat. Unanticipat chang in skill prmium procss in Activ houshols r-optimiz in 1995 bas on nw procss. 44 / 61

45 Exrcis 2 Estimat procss for th skill prmium Skill Prmium 1980 Lvl ξ f ξ m pr 1995 Trn (5 yar growth factor) F M Lvl ξ f ξ m post 1995 Trn (5 yar growth factor) F M / 61

46 Distribution of Houshols by Eucation l Fraction of houshols for ach ucation pair l l l l l l l l l Sourc: March Supplmnt of CPS Calibration 46 / 61

47 Exrcis 2 Participation Participation rops most for womn with collg husbans, spcially thos with high school. Participation riss for collg womn with high school husbans, contrary to ata. Marri Womn s Participation, Avrag Wif-Husban Eucation HS-HS HS-C C-HS C-C Mol actual pr-1995 projct prcnt chang Data actual pr-1995 projct prcnt chang Constant φ f rsults 47 / 61

48 Exrcis 2 Wags Simulation capturs small fraction of slowing convrgnc in wags across gnr, consistnt with iffrntial by skill. Du to ris in participation of collg wivs with high school husbans in th mol, skill prmium riss slightly mor for womn than for mn. Skill Prmium Mal/Fmal Wags Avrag Mal Fmal HSchool Coll Mol actual - projct pr-1995 prcnt chang Data actual - projct pr-1995 growth prcnt chang Constant φ f rsults 48 / 61

49 Summary Empirical vinc: Slowing labor forc participation of marri womn, particularly for thos with collg husbans an high incom husbans, suggsting rol for incom ffcts. Quantitativ analysis: Incom ffcts can account for approx. 60% of th clin in participation of womn with collg husbans for , rlativ to pr-1995 trn. Missing forc: Participation of collg womn with high school husbans riss in mol. Participation of high school womn with high school husbans constant by sign. Mol capturs small fraction of ris in mal/fmal wag ratio for collg workrs, ovrpricts ris in fmal skill prmium. 49 / 61

50 Intrnational Evinc Most OECD countris isplay a ngativ corrlation btwn th growth in inquality an womn s participation Australia Fmal - Ags (LFPR) Top 10%/Avrag Canaa Fmal - Ags (LFPR) Top 10%/Avrag Franc Fmal - Ags (LFPR) Top 10%/Avrag Grmany 4 70 Spain Fmal - Ags (LFPR) Top 10%/Avrag Fmal - Ags (LFPR) Top 10%/Avrag Swn Fmal - Ags (LFPR) Top 10%/Avrag UK USA Fmal - Ags (LFPR) Top 10%/Avrag Fmal - Ags (LFPR) Top 10%/Avrag Figur: Participation an top 10%/avrag incom ratio. Sourc: OECD 50 / 61

51 Ongoing work Incom tax: incorporat 1993 tax rform. Houshol prouction: nogniz hom prouction rquirmnt allowing to substitut tim with markt goos. Incorporat frtility choic. 51 / 61

52 Back Up Slis

53 Back up slis Aitional channls: Frtility choic Earnings isprsion by gnr Intra-houshol inquality Labor supply of mn Exrcis 1: Wags Exrcis 2: Constant φ f 53 / 61

54 Aitional Channls Frtility choic with quality/quantity tra-off Slowing in participation occurs for marri womn with an without chilrn. Low opportunity cost of aitional chilrn in high incom on arnr houshols = quantity of chilrn may ris in aition to quality. Hypothsis is consistnt with ris in frtility for collg-collg houshols an high incom husban houshols in th mi-1990s. 54 / 61

55 Frtility by houshol typ List 55 / 61

56 Earnings isprsion by gnr 90/50 prcntil ratio ros mor for mn than for womn ovr sam prio Earnings isprsion, 90prc/50prc full tim, full yar workrs Yar Earnings isprsion, 50prc/10prc full tim, full yar workrs Yar Mals Fmals Mals Fmals Sourc: March Supplmnt of CPS Skill Prmium by Gnr 56 / 61

57 Labor supply of mn Participation of marri mn has rmain stabl. Mal Labor Forc Participation Rat Yar all mn marri mn singl (nvr marri) mn Sourc: March Supplmnt of CPS Labor Supply of Marri Mn 57 / 61

58 Labor supply of marri womn Participation by husban s arnings 10th prcntil 50th prcntil th prcntil Yar LFP, actual LFP, prict Graphs by Husban s arn. prcntil Sourc: March Supplmnt of CPS Dash lin corrspons to participation probit, in an out of sampl. Actual vs Projct 58 / 61

59 Exrcis 1 Rspons of wags by gnr Skill prmium riss mor for mn in th mol, as in th ata. Mol magnitu much highr than ata. Mal/fmal wag ratio riss mor for collg than high school workrs, as in th ata, mol magnitu of iffrnc largr than ata. Skill Prmium Mal/Fmal Wags Mal Fmal HS Coll Mol 1980 calibration: skill prmium-actual % chang Data Avrag : actual- pr1995 projction % chang Participation 59 / 61

60 Exrcis 2 Constant φ f rsults Baslin Rsults Participation rops most for womn marri to collg husbans, spcially thos with high school. But participation riss for collg womn with high school husbans, contrary to ata. Marri Womn s Participation, Avrag Hh Typs HS-HS HS-C C-HS C-C Mol actual skill prmium pr-1995 projct skill prmium % chang Data actual projct using pr-1995 growth % chang / 61

61 Exrcis 2 Constant φ f rsults Simulation capturs th gnr ivrgnc in th skill prmium. It os not captur th slowing convrgnc in wags across gnr for skill workrs, u to th strong ris in participation an hours of collg womn with high school husbans. Skill Prmium Mal/Fmal Wags Avrag Mal Fmal HS Coll Mol actual skill prmium pr-1995 projct skill prmium prcnt chang Data actual-projct using pr-1995 growth prcnt chang Baslin Rsults List 61 / 61