The macroeconomics of the quiet revolution: Understanding the implications of the rise in women's participation for economic growth and inequality

Jonathan Heathcote, Kjetil Storesletten, Giovanni L. Violante

    Research output: Contribution to journalArticle

    Abstract

    We study the impact of the rise in female labor supply on the economic performance of the United States over the period 1967-2002 through the lens of a calibrated structural model. The model features all the key forces behind the increase in female participation (the "Quiet Revolution"): (1) the decline in marriage rates, (2) the narrowing gender wage gap, (3) the preference (or cultural) shift towards market work, and (4) the change in women's bargaining power within the household. We find that preference shifts and the rise in relative wages of women were the most important driving forces behind rising women's participation, while changes in marriage patterns have also had a sizeable effect. We conclude that half of the growth in US earnings per capita over this period can be traced to growth in female labor supply. We also find that the rise in female labor supply has had offsetting effects on income inequality and, therefore, its overall role has been negligible relative to skill-biased demand shifts and rising residual wage volatility.

    Original languageEnglish (US)
    JournalResearch in Economics
    DOIs
    StateAccepted/In press - Feb 6 2017

    Fingerprint

    Participation
    Macroeconomics
    Female labor supply
    Economic growth
    Economic inequality
    Marriage
    Bargaining power
    Gender wage gap
    Structural model
    Economic performance
    Relative wages
    Household
    Income inequality
    Driving force
    Wages
    Market work

    Keywords

    • Female Labor Supply
    • Growth
    • Inequality

    ASJC Scopus subject areas

    • Economics and Econometrics

    Cite this

    The macroeconomics of the quiet revolution : Understanding the implications of the rise in women's participation for economic growth and inequality. / Heathcote, Jonathan; Storesletten, Kjetil; Violante, Giovanni L.

    In: Research in Economics, 06.02.2017.

    Research output: Contribution to journalArticle

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