Macroeconomic influences on female labor force participation: the Latin American evidence

Female labor force participation has increased significantly in Latin America during the last two decades, a period which was also characterized by large fluctuations in aggregate economic activity. The particular question that this paper focuses on is: How do macroeconomic conditions affect female labor market experiences? Two distinct macroeconomic influences are analyzed: the change in the structural composition of employment between sectors, particularly the rising share of the services sector, and the business cycle, captured by deviations of output from trend and by the rate of unemployment. Part of the rising female share in total employment can be explained by increases in the importance of sector which tend to employ relatively more women, particularly services, but the lion’s share of the explanation is found in increases in the proportion of women employed within each sector. As to the cyclical patterns, the evidence indicates that, after controlling for other relevant variables, female labor force participation increased during recessions among a) relatively low income countries and b) households were the spouse was unemployed