When Women Get Paid for Work: The Entry of Women to the Paid Labor Market

When Women Get Paid for Work: The Entry of Women to the Paid Labor Market CEPR Basic Economics Seminar Heather BousheyOctober 20, 2005

Today’s talk • The past half-century has witnessed a significant and sustained rise of women’s labor force participation. • In the 1960s, the majority of mothers worked at home, by the 1990s, the majority were in the paid labor market. • The labor force participation rate (LFPR) is the share of the population either at work or searching for a job (unemployed). • This is one of the most important, society-altering trends of our recent history, one which we, as a society, have not yet fully adjusted to. • In the next seminar series, we will focus on the gender pay gap, including the “mommy pay gap”.

Were women “pushed” or “pulled”into the labor market? • Is work a “choice” that women make for their own benefit or is it necessary to sustain their and their family’s livelihood? • The answer will significantly affect how we think about policy. • Recent media about women “opting out” of employment highlights the lack of resolution to this question.

Figure 1. Labor supply of men and women, age 20 and over

Figure 2a. Labor supply of women by presence of children

Caveat: Women have always worked • By 20th century, paid work (valued work) mostly occurs outside the home. • Historically, wives were seen as the husband’s “yoke-mate” (Coontz 2005, p. 110), participating fully in the family’s farm or trade. • Initially, women still had intensive housework, but latter 20th century technological advances limit the needs for an industrious homemaker. • Lower-income women, women of color, and immigrant women always had been more likely than middle-class white women to work outside the home. • Work in the home is also work, even though it’s unpaid.

Caveats aside, why did women’s LFPR increase? • Was it family economics pushing them towards employment? • Was it the feminist movement that opened the doors for women’s employment (empowerment)? • Short answer: BOTH • In Seminar 3, John Schmitt showed two figures that I want to review.

Women’s earnings critical to family income (push factors) • Without the contribution of wives, families would have seen a decline in income (Figures 3 and 4, Table 1). • As was, income was relatively flat from the early 1970s onwards, compared to the period from WWII until the early 1970s (Again, a figure from John’s presentation, Figure 5). • Critical for economic mobility (next week’s topic) (Table 2). • Bradbury and Katz (2004) found that favorable family income mobility outcomes are associated with greater wives’ labor market activity.

Figure 3. Real hourly wage growth, men, 1979-2004 Source: John Schmitt, 2005. “Labor markets and economic inequality in the United States since the end of the 1970s.”

Figure 4. Real hourly wage growth, women, 1979-2004 Source: John Schmitt, 2005. “Labor markets and economic inequality in the United States since the end of the 1970s.”

Table 1. Income growth, married-couple families with children Source: Mishel, Bernstein, and Allegretto, The State of Working America 2004-05, p. 104.

Figure 5. Real median family income, 1947-2003 Source: John Schmitt, 2005. “Labor markets and economic inequality in the United States since the end of the 1970s.”

Table 2. Decomposing annual earnings growth, prime-age wives with children Source: Mishel, Bernstein, and Allegretto, The State of Working America 2004-05, p. 105.

In short, economics of the family requires a second earner • In most families, a woman works because she has to, not necessarily because she wants to have a career. • It is the case that not working carries long-term penalties in terms of wage gains, but working under those conditions is certainly not a “choice”. • There are also cumulative effects, when women moving into paid employment is part of a broad transformation of social life.

Figure 6. The “two-income trap” Source: Warren and Tyagi, 2005. The Two-Income Trap, p. 51.

Answer to push or pull affects how to think about “work/family” • Centuries-long movement of work out of the home requires a new mode of care and household production. • Children, sick, the elderly need care. • Historically, provided while women worked at home (farm, trade), alongside those needing care. • More recently, greater commute times (suburban living) necessitates even longer hours of care.

Women in paid employment is causing broad transformations • Workplace practices. • Family practices. • Social policy. • This is not to say, however, than any of these changes necessarily have occurred.

Workplaces have still not adapted • Most workers (over 60%) do have access to paid sick days when their children take ill. • Long hours—and increasing hours of work, especially to get ahead in elite and semi-elite fields. • Limited opportunities for part-time employment at parity with full-time in terms of pay scale, promotion opportunities, and benefits.

Family life showing some signs of adaptation • Time use surveys reporting show that men are increasing parental/housework hours while women decreasing. • Still, women do about twice as much housework as men. • FMLA often used by men, but usually for own illness.

Social policy remains unfocused on family realities • The U.S. has no national paid maternity or paternity leave. • U.S. workers have no right to paid sick days. • Child care inadequate and school districts still have less than full-day kindergarten.

So, are women opting out of employment by choice? • Louis Story, Lisa Belkin, etc. argue that elite women are “choosing” to stay home rather than work. • But: • Most families need mothers’ wages. • Most families do not have the luxury of adaptive institutions.

Figure 2b. Labor supply of women by presence of children

Lackluster labor market led to falling employment • Women were especially hard hit during the recession of 2001. • Prime-age women with children (ages 25 to 44) saw a 4.4 percentage point decline in their employment rate from 1999 to 2003. • However, a large drop (-3.2 percentage points) also occurred for women without children. • Indicates that the drop in women’s EPOP is not due to mothers “opting out” of employment, but is rather a widespread phenomenon among women, as well as men.

Figure 7. Changes in employment level, men

Figure 8. Changes in employment level, women

Work Cited:Gender Bias in the Current Economic Recovery?: Declining Employment Rates for Women in the 21st Century by Heather Boushey, David Rosnick, and Dean Baker, August 2005 http://www.cepr.net/pages/publications/ labor_markets_2005_08_29.pdf

When Women Get Paid for Work: The Entry of Women to the Paid Labor Market Heather Boushey Hboushey@cepr.net Center for Economic and Policy Research www.cepr.net

When Women Get Paid for Work: The Entry of Women to the Paid Labor Market