| Explaining the Labor Force Participation of Women 20-24 (2007) | |||||||||||||
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| Between the mid 1960s and the late 1970s there was a remarkable rise in the labor force participation of women and then a leveling off that has persisted through the mid 1990s. This paper attempts to explain the labor force participation of women 20-24 over this period. A variable is constructed measuring the potential wage rate of women 20-24 that can be taken to be exogenous to the labor supply decision, and a potential relative income variable is constructed, based on Easterlin’s (1980) relative income hypothesis, that can also be taken to be exogenous. Both variables are estimated using Easterlin’s “cohort wage ” hypothesis, and both are found to be important in explaining labor force participation. The basic equation estimated does well in various tests that were performed on it, and it appears to explain well the rapid rise and then leveling off of the labor force participation of young women. 1 | |||||||||||||
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