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

• Date: 01 January 2014
• DOI: http://doi.org/10.1111/irel.12046
• Published date: 01 January 2014
• Author: Jin Young Lee

The Plateau in U.S. Women’s Labor Force

Participation: A Cohort Analysis

*

JIN YOUNG LEE

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 pla-

teau and the earlier upward trend in FLFP appeared within almost every category

broken down by education, marital status, and child-rearing.

Introduction

ONE OF THE MOST REMARKABLE CHANGES IN THE U.S. LABOR MARKET IN THE

twentieth century was a massive increase in the rate of female labor force partici-

pation (FLFP). The FLFP rate was only 17 percent in 1890 (Goldin 2000: Table

10.1), but had more than tripled by a century later, reaching 59 percent in 1994

(Figure 1). This trend seems even more dramatic when contrasted with the

gradual decline in men’s labor force participation.

1

Since 1994, however, an

important new pattern has emerged: after many decades of trending upward, the

FLFP rate has leveled off at around 60 percent.

2

This recent stagnation in the labor

force involvement of U.S. women is rare even in world economies (U.S. Bureau

of Labor Statistics 2011).

The authors’saffiliation is Korea Economic Research Institute, 27-3 Yeouido-dong Yeongdeungpo-gu,

Seoul 150-705, South Korea Email: jinylee@keri.org.

JEL: I20, J11, J12, J13, J16.

*This paper is the second chapter of my Ph.D. dissertation at Michigan State University. I am grateful to

Gary Solon, Stacy Dickert-Conlin, and Steven Haider for their valuable comments and guidance. I also

thank Do Won Kwak and three anonymous referees for their helpful suggestions.

1

See Juhn and Potter (2006) and Fallick and Pingle (2007) for the trend in U.S. men’s labor force par-

ticipation.

2

Although the 1994 Current Population Survey (CPS) redesign has caused changes in the measurement

of many of the statistics derived from the CPS (Polivka and Miller 1998), trends in the FLFP are not sensi-

tive to the redesign. All estimates presented in this paper are based on data unadjusted for the 1994 CPS

redesign. Changes in the percent institutionalized also are not an issue because the trend in the fraction of

women institutionalized was stable over time. My calculation using U.S. Censuses (Ruggles et al. 2010)

shows that the percentages of women institutionalized (correctional and mental institutions, and institutions

for the elderly, handicapped, and poor) in 1980, 1990, and 2000 are 1.37, 1.49, and 1.34, respectively.

INDUSTRIAL RELATIONS, Vol. 53, No. 1 (January 2014). ©2013 Regents of the University of California

Published by Wiley Periodicals, Inc., 350 Main Street, Malden, MA 02148, USA, and 9600 Garsington

Road, Oxford, OX4 2DQ, UK.

46

The end of the upward trend in U.S. women’s labor force participation is an

important and puzzling phenomenon. For example, labor economists tradition-

ally have described the long-running rise in women’s labor force participation

as a movement along a positively sloped labor supply curve in response to real

wage growth. The plateau in women’s labor force participation, however, has

occurred despite continued real wage growth (Eckstein and Lifshitz 2011).

A simple labor supply story therefore cannot account for the trend shift unless

it involves a credible explanation for why the labor supply curve for women

switched from quite positively sloped to inelastic.

This paper uses March Current Population Survey (CPS) data from 1968 to

2010 to assemble a clear and detailed catalog of facts about the plateau in

U.S. women’s labor force participation. Following and extending earlier work

by Goldin (2006) and Fallick and Pingle (2007),

3

Ifind that a great deal of

what has happened to FLFP can be succinctly summarized in terms of trends

across birth cohorts. In addition to providing a more up-to-date cohort analy-

sis, I conduct shift-share analyses that document within-group trends and com-

30

35

40

45

50

55

60

65

70

75

80

85

90

48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10

(%)

Year

Men

Women

FIGURE 1

LABOR FORCE PARTICIPATION RATES FOR MEN AND WOMEN

NOTE: The figure shows civilian labor force participation rates of U.S. men and women age 16

or older.

SOURCE: 1968-2010 IPUMS-CPS

3

Aaronson et al. (2006) and Percheski (2008) are other precedents.

The Plateau in the FLFP /47