Elasticities of Married Women’s Labor Supply 2007-2014

Since the year 2000, married women’s labor force participation in the United States has been decreasing. To examine this decline, economists have used wage elasticities to explore how married women’s hours worked have responded to changing rewards in the labor market. The current study, which updates the work of Macunovich (2010), examines how married women’s own wage elasticity and cross wage elasticity have changed in recent years. Using data from the U.S. Current Population Survey, it finds that married women’s elasticities of labor supply with respect to their own wage have shrunk from 2007 to 2014, indicating that married women’s hours worked are less responsive to wage changes than in previous decades. In addition, married women’s cross wage elasticities have shrunk over this period, which means that married women’s hours worked are also less affected by changes in husband’s wages than in previous decades. These results suggest that understanding recent changes in married women’s labor supply may have less to do with traditional economic factors such as wages than other, as yet unmeasured, determinants