1 Trends in Women’s Participation Rates

2 We have used an economic model to illustrate some of the details that can explain why people work and how much they work. In this section we want to focus on the factors that influence women participation. In general, we saw 1) Higher wages lead to more work, except when the income effect outweighs the substitution effect 2) Higher non-labor income leads to increasing chance of less work 3) Preferences for leisure/labor influence the amount of work. Next, let’s turn to ideas that contributed to 1-3 occurring.

3 Value of Market Time Influences 1) Education rates for women have risen. The income education connection is working for women, raising wages and thus leading to greater market participation. 2) Demand for work in jobs traditional done by females has been rising and this leads to higher wages. Example would be nursing. 3) Increases in productivity throughout the economy have increased wages for all.

4 Value of Nonmarket time influences If nonmarket time is less valuable to folks we would expect preferences to change to more like a workaholic we saw before. 1) Labor-saving technology in the home decreased the value of “leisure.” 2) Rising income of husbands tended to make leisure more attractive to wives, but the higher wages women can get tended to make the substitution effect larger than the income effect. 3) Changes in tastes – You may not remember the TV show “Home Front,” but the show was about the United States during World War II. The show depicted the struggle women faced after the war. Many women lost jobs to men. But, the presence of women in the workplace then, began a process of cultural change and this today shows up in greater preference for work among women.