Sectoral Changes and the Increase in Womens Labor Force Participation

Throughout the second half of the 20th century, women in the U.S. decided to move increasingly into the labor market. This paper investigates the growth of the service sector as an explanation for the increase in womens employment. It develops an economic model that can account for the increase in womens employ-ment and the growth of the service sector at the same time. A growth model with three sectors and a home production technology is constructed in order to quan-titatively assess the contribution of sectoral productivity di¤erences to the change in womens employment decision. The model parameters are calibrated to match time allocations in 1950, and sectoral productivities are taken from the data. This model demonstrates that a higher rate of productivity growth in market services compared to home services can account for a large fraction of the observed increase in womens employment from 1950 to 1990. I am especially grateful to Ayse Imrohoroglu for her guidance throughout this project. I also wan