Women’s employment has shaped the course of recent business cycles

This paper studies the impact of changing trends in female labor supply on productivity, TFP growth and aggregate business cycles. We find that the growth in women’s labor supply and relative productivity added substantially to TFP growth from the early 1980s, even if it depressed average labor productivity growth, contributing to the 1970s productivity slowdown. We also show that the lower cyclicality of female hours and their growing share can account for a large fraction of the reduced cyclicality of aggregate hours during the great moderation, as well as the decline in the correlation between average labor productivity and hours. Finally, we show that the discontinued growth in female labor supply starting in the 1990s played a substantial role in the jobless recoveries following the 1990-1991, 2001 and 2007-2009 recessions. Moreover, it depressed aggregate hours, output growth and male wages during the late 1990s and mid 2000s expansions. These results suggest that continued growth in female employment since the early 1990s would have significantly improved economic performance in the United States.

That is the abstract of a new NBER working paper by Stefania Albanesi.


In other words, women flooding into the workforce is a big reason why profits but not wages have gone up so much in recent decades. So what The Economy needs is more hair of the dog that bit it.

Yes, an important result if true - need to revisit a lot of debates on both sides about 'what is wrong' with the economy since the 1970s. But workforce participation doesn't have a lot more room to grow for better or for worse. Unless you think literally every household is going to be a two-earner household. There's a lot of reasons this is extremely unlikely in the US.

That was true in the 1970s, but note that women's labor force participation has actually declined since 2000.

Of course, this blog post and the preceding one are connected. Women did it! While women's increased participation in the labor force contributed to economic growth, most of the growth went to capital not labor. It's so depressing it might drive one to suicide. One might ask what labor all of these women were doing that contributed to economic growth that mostly went to capital? Did they replace men on the production line at lower wages or did they do something else entirely because of the changing nature of the economy (from industrial to information)? Here's an article in the NYT about a book to be published today on corporate executives political contributions: https://www.nytimes.com/2019/03/19/business/dealbook/executives-political-contributions.html Guess which party they overwhelmingly contributed to. Think about this: men are losing their place in the economy while voting for Republicans and women are gaining their place in the economy while voting for Democrats. It's confusing.

Rosie the Riveter gets it done! We also need more women inventors along the lines of Hedy Lamarr.

It's Greek to me. And apparently to you too. Who knew Ray is Greek. I posted in a comment a day or two ago that I have lots of Greek friends because I am from a sunbelt city with a large Greek population - not difficult to guess the city. Anyway, my longtime assistant, who is Greek, would bring me baklava made by her mostly Greek-speaking mother and her child's grandmother (Yaya, which means woman but has become synonymous with grandmother). Ah, baklava. My question: did you bring your Philippine companion with you?

Also, it's true that Hedy Lamarr was an inventor (in addition to being a pin up girl). Mel Brooks created a character, Hedley Lamarr, who, despite the similar name, was neither a) a pin up girl, b) much of an actor, or c) a genius. At the end of the film, Blazing Saddles, Hedley runs out of the film, runs away from the movie lot, and runs to . . . .

So they found out in 2019 that if people worked more GDP would be bigger. Truly a nobel prize worthy discovery that nobody would even suspect.

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