The Plateau in U.S. Women's Labor Force Participation: A Cohort Analysis

Abstract

After going up steadily for the last century, the female labor force participation (FLFP) rate in the United States suddenly leveled off in the early 1990s. Using March Current Population Survey data, I find that the FLFP stopped rising for birth cohorts from the 1950s on. My shift‐share analyses show that both the plateau and the earlier upward trend in FLFP appeared within almost every category broken down by education, marital status, and child‐rearing.

Why Are U.S. Women Decreasing Their Labor Force Participation if Their Wages Are Rising?

“…In each analysis, I use the earliest year as base year s. The year‐by‐year shift‐share decomposition results are shown in Figure . First, consistent with the findings in Lee (), the rise in the female LFPR between 1968 and 2000 comes from within‐group increases. The composition effects are always negative and very close to zero, which suggests that the age structure change in 1968–2000 had little impact on the overall trend in female labor force participation.…”

“…Most importantly, between 2000 and 2015, the percentage that completed college increased from 21% to 29%, and this group displays a LFPR about 15 percentage points higher than for those with high school or less. The dramatic rise in U.S. women's educational attainment has been thoroughly documented in previous research (Goldin 2006;Goldin, Katz, and Kuziemko 2006;Lee 2014), and it will play an important role in the wage analysis of the next section. Third, considering additional demographic characteristics besides age, especially education, only increases the "unexplained" component, so we continue to face the question of why within-group reductions in labor force participation, especially for those under age 55, occurred despite apparent growth in real wages.…”

“…See Lee () and the references therein. The apparent arrival of the plateau may have been slightly delayed by the 1994 CPS redesign, which Polivka and Miller () find raised the measured female LFPR by about 1 percentage point.…”

The Age-Period-Cohort-Interaction Model for Describing and Investigating Inter-cohort Deviations and Intra-cohort Life-course Dynamics

“…That is, the recent trends may reflect structural change in the age composition of the female population (Aaronson et al 2014). The cohort replacement process may also contribute to the stalled LFP rates through older cohorts with higher participation rates exiting and younger cohorts with lower participation rates entering the labor force (Lee 2014). Meanwhile, important social and demographic shifts such as educational attainment, number of children, attitudes, and beliefs are more likely to be a cohort-specific than period-specific process as these forces and changes mostly affect individuals at certain ages (Balleer, Gomez-Salvador, and Turunen 2014;Farré and Vella 2013;Fernández 2013;Goldin 2006).…”

On Why Gender Employment Equality in Britain Has Stalled Since the Early 1990s

“…They suggest the stall since the mid-1990s in the progress of higher female participation with each successive birth cohort was associated with cohorts of women born since the 1950s not having substantially greater attachment to work than those before them. This is confirmed by Lee (2014), who finds this was the case regardless of education, childbearing, caring responsibilities and marital status. Juhn and Potter (2006) also suggest that the female rate is unlikely to rise above the level seen in the 1990s, unless there are Government or private sector-led initiatives, such as the expansion of income tax credits, changes to social security that increase the retirement age and employer-led initiatives to improve flexible working.…”