Lecture 12 Marriage, family and work

Lecture 12 Marriage, family and work Matti Sarvimäki History of Economic Growth and Crisis 5 December 2016 Model of labor supply Evolutions The Q...
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Lecture 12 Marriage, family and work Matti Sarvimäki

History of Economic Growth and Crisis 5 December 2016

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

Outline of the course

1

The Malthusian Era

2

Fundamental causes of growth

3

Innovation and crises

4

Unleashing talent 1 2 3

Migration Intergenerational mobility Marriage, family and work 1 2 3 4 5

Matti Sarvimäki

a simple model of labor supply evolutions and a revolution efficiency gains from more efficient allocation of talent the power of the pill the impact of WWII (papers for essays)

Economic History

Marriage, family and work

1 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

A simple model of labor force participation

Goldin (2006): changes in female labor force participation can be explained with (exogenous) changes in two parameters own-wage (compensated) elasticity income elasticity

These parameters determine reservation wage → labor force participation

Next: simple model to define these concepts

Matti Sarvimäki

Economic History

Marriage, family and work

2 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

Non-labor income and labor supply y-axis: consumption, x-axis: hours outside market work

Consumption ($)

Workers value

F1

consumption time outside of market work (leisure + home production)

F0 P0 $200

Maximize utility U0

$100

E0

70 80

by choosing hours of work subject to a budget constrain

110

y-axis: consumption, x-axis: hours outside market work. Note that the slope of the budget constraint corresponds to hourly wage (i.e. the rate at which non-market time can be exchanged to money) Matti Sarvimäki

Economic History

Marriage, family and work

3 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

Non-labor income and labor supply Consumption ($)

Increase in non-labor income

F1

pure income effect → labor supply decreases if leisure is a normal good

F0 P1 U1 P0 $200

U0

$100

E1

E0

70 80

income elasticity = percentage change in hours divided by the percentage change in non-labor income

110

y-axis: consumption, x-axis: hours outside market work.

Matti Sarvimäki

Economic History

Marriage, family and work

3 / 28

Wages and labor supply Consumption ($)

U0 F

P

V

E 0

65 70

y-axis: consumption, x-axis: hours outside market work

110

Wages and labor supply Consumption ($) U1 G R U0

F

P

V E

0

65 70

y-axis: consumption, x-axis: hours outside market work

110

Wages and labor supply Consumption ($)

Income effect Income effect: P-Q Substitution effect: Q-R -> Better wages may increase or decrease labor supply

U1 G R D

F

D

P

V E

0

65 70

Substitution effect leisure becomes more costly

Q U0

the worker can afford to consume more leisure

80

y-axis: consumption, x-axis: hours outside market work

110

Own-wage (compensated) elasticity = percentage change in hours divided by the percentage change in wages after subtracting the income effect of the wage change (i.e. keeping utility constant)

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

Reservation wage

Consumption ($) H

G

E = endowment Has Slope -wlow

0

U0

T

Hours of Leisure

y-axis: consumption, x-axis: hours outside market work

Matti Sarvimäki

Economic History

Marriage, family and work

5 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

Reservation wage

Consumption ($)

Reservation wage: worker is indifferent between working a little and not at all Depends on non-labor income and preferences (curvature of the

H Has Slope -whigh

indifference curve at zero hours)

Y G UH E = endowment Has Slope -wlow

U0 Slope = reservation wage

0

T

Hours of Leisure

y-axis: consumption, x-axis: hours outside market work

Matti Sarvimäki

Economic History

Marriage, family and work

5 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

Evolutions and a revolution Labor force participation rates, Goldin (2006, AER P&P)

ND PROCEEDINGS

MAY2006

100

The phases: 1 Independent female worker (late 19C to 1920s)

Males, 25 to 44 years 80

U.S.Census CPS

2

60

Females, 25 to44 yearsi

Working married women (1930s to 1950)

3

40 MarriedWhiteFemales, 35 to 44 years 20

Roots of the revolution (1950s to 1970)

4

The quiet revolution (1970s to today)

0 1880

19(00

1920

1940

1960

1980

2000

1. LABOR FORCE FIGURE PARTICIPATION RATESFOR ANDMALESBYAGEANDMARITAL FEMALES STATUS: 1890 To 2004 Notes: All races, maritalstatuses, and educationgroups are

Matti Sarvimäki EconomicThe History included unless indicatedotherwise. labor force partic- Marriage, family and work

6 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

Evolutions and a revolution Labor force participation rates, Goldin (2006, AER P&P)

ND PROCEEDINGS

MAY2006

100

The phases: 1 Independent female worker (late 19C to 1920s)

Males, 25 to 44 years 80

U.S.Census CPS

2

60

Females, 25 to44 yearsi

(1930s to 1950) 3

40 MarriedWhiteFemales, 35 to 44 years 20

0 1880

Working married women Roots of the revolution (1950s to 1970)

4

The quiet revolution (1970s to today)

19(00

1920

1940

1960

1980

2000

“those 1. in the evolutionary phases married early enough that their adult identity was FORCE FIGURE LABOR PARTICIPATION RATES FOR formed AND afterMALES marriage [...] [the revolution] was a change from passive actors, who take ANDMARITAL FEMALES BYAGE STATUS: the income and time 1890allocation To 2004 of other members as given, to active participants who bargain somewhat effectively in the household and the labor market.” Notes: All races, maritalstatuses, and educationgroups are Matti Sarvimäki EconomicThe History included unless indicatedotherwise. labor force partic- Marriage, family and work

6 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

Independent Female Worker, until 1920s Goldin (2006, AER P&P)

Female workers generally young and unmarried piece workers in manufacturing, domestics, laundresses... very few professionals, typically teachers and clerical employees

Women almost always exited the workforce at marriage except in the poorest and some of the most educated homes

Matti Sarvimäki

Economic History

Marriage, family and work

7 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

Independent Female Worker, until 1920s Goldin (2006, AER P&P)

Female workers generally young and unmarried piece workers in manufacturing, domestics, laundresses... very few professionals, typically teachers and clerical employees

Women almost always exited the workforce at marriage except in the poorest and some of the most educated homes

High income effect low productivity home production + social stigma → high willigness to exchange consumption to non-market time

Low substitution effect unpleasant jobs → % increase in wages leads to low % increase in hours Matti Sarvimäki

Economic History

Marriage, family and work

7 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

Evolutions and a revolution Labor force participation rates, Goldin (2006, AER P&P)

ND PROCEEDINGS

MAY2006

100

The phases: 1 Independent female worker (late 19C to 1920s) 2 Working married women (1930s to 1950)

Males, 25 to 44 years 80

U.S.Census CPS 60

Females, 25 to44 yearsi

3

40 MarriedWhiteFemales, 35 to 44 years

Roots of the revolution (1950s to 1970)

4

The quiet revolution (1970s to today)

20

0 1880

19(00

1920

1940

1960

1980

2000

1. LABOR FORCE FIGURE PARTICIPATION RATESFOR ANDMALESBYAGEANDMARITAL FEMALES STATUS: 1890 To 2004

Matti Sarvimäki

Economic History

Marriage, family and work

7 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

Working married woman, 1930s to 1950 Goldin (2006, AER P&P)

Jobs for unmarried women become more “respectable” increased demand for clerical work growth in high school enrollment and graduation in 1910–1930

Income effect declined work for women became more accepted (e.g. marriage bars almost entirely eliminated after the early 1940s)

Substitutions effect rose part-time work became more common → lower fixed-cost of participation (note that fixed-costs omitted from the model above) i.e. female labor supply comes more responsive to wages

Reservation wage declined new household technologies (refrigerator, washing machine) diffusion of basic facilities such as electricity, running water Matti Sarvimäki

Economic History

Marriage, family and work

8 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

Evolutions and a revolution Labor force participation rates, Goldin (2006, AER P&P)

ND PROCEEDINGS

MAY2006

100

The phases: 1 Independent female worker (late 19C to 1920s)

Males, 25 to 44 years 80

U.S.Census CPS

2

60

Females, 25 to44 yearsi

Working married women (1930s to 1950)

3

40 MarriedWhiteFemales, 35 to 44 years

Roots of the revolution (1950s to 1970)

4

The quiet revolution (1970s to today)

20

0 1880

19(00

1920

1940

1960

1980

2000

1. LABOR FORCE FIGURE PARTICIPATION RATESFOR ANDMALESBYAGEANDMARITAL FEMALES STATUS: 1890 To 2004

Matti Sarvimäki

Economic History

Marriage, family and work

8 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

Roots of the revolution, 1950s to 1970 Goldin (2006, AER P&P)

Income effect continues to decline work for married women becames more acceptable

Substitution effect continue to rise further rise of part-time employment

But: married women were still the secondary earners take the labor supply decisions of their husbands as given tied stayers at times and tied movers at others human capital continue to increase ... but the investments occur mainly off the job ... and are based on low expectations (next) “Some advancement was possible in offices and elsewhere, but not much [...] Interviews for first jobs, even those of women with college degrees, often began with the straightforward question: How well do you type?" Matti Sarvimäki

Economic History

Marriage, family and work

9 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

Evolutions and a revolution Labor force participation rates, Goldin (2006, AER P&P)

ND PROCEEDINGS

MAY2006

100

The phases: 1 Independent female worker (late 19C to 1920s)

Males, 25 to 44 years 80

U.S.Census CPS

2

60

Females, 25 to44 yearsi

Working married women (1930s to 1950)

3

40 MarriedWhiteFemales, 35 to 44 years

Roots of the revolution (1950s to 1970)

4

The quiet revolution (1970s to today)

20

0 1880

19(00

1920

1940

1960

1980

2000

1. LABOR FORCE FIGURE PARTICIPATION RATESFOR ANDMALESBYAGEANDMARITAL FEMALES STATUS: 1890 To 2004

Matti Sarvimäki

Economic History

Marriage, family and work

9 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

The Quiet Revolution Goldin (2006, AER P&P)

Participation rates do not suggest a revolution in the 1970s Goldin argues that the revolution occured along three dimensions expanded horizons altered identitites decision making

Next: time-series describing each of these factors

Matti Sarvimäki

Economic History

Marriage, family and work

10 / 28

Model of labor supply

Evolutions

The Quiet Revolution

e f e r '

t n t

The Pill

The War

Employment expectations of female youth by age Goldin (2006, AER P&P)

T. ELYLECTURE

g h h . t r -

Efficiency

9

0.9 0.8 35

0.7

age at

0.6 employed 0.5 be to

0.4 Expect

16 to 17 year olds . 8_t. _19 _yearods 20 to 21 year olds

In the late 1960s, women “began with expectations similar to the actual participation of their mothers’ generation (their prediction was around 0.33 whereas their mothers’ actual rate was about 0.3). But in the next ten years young women began to correctly anticipate, and in fact slightly overstate, their future labor force participation rates” “That is, they could plan for careers rather than jobs”

0.3 09 1965 1970 1975 1980 1985 Data from the National Longitudinal Survey (NLS) of Young Women beginning with 14–24 year old women inYOUTH 2. EMPLOYMENT OF FEMALE FIGURE EXPECTATIONS 1968 and the NLS of with 14–21 BYYouth AGE:beginning 1967 TO 1984 year-olds in 1979. Both surveys asked about expectations of having paid employment Notes: The NLS data are at theage 35. to whether an indi-

response vidual stated she expected to be in the paid labor force at age 35 and are given here for white women. The NLS data

Matti Sarvimäki

Economic History

Marriage, family and work

11 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

Gender gap in college attendance and graduation Goldin (2006, AER P&P) 10

AEA PAPERSAND PROCEEDINGS

0.10

0.05 rate male 0.00 minus rate -0.05

CollegeAttendance

CollegeGraduot

Female -0.10

“In the271970s and 1980s, girls began to take more college preparation courses 26 Some college [and] increased- their math and reading - College graduate scores25by nearly one-fifth of a standard deviation, so that in 1992 girls who 24 weremarriage high school seniors were just first behind boys in math and slightly at 23 considerably ahead in reading. As a age consequence, females greatly increased 22 their college attendance and graduation Median 21 rates relative to males beginning with birth cohorts in the late 1940s.” 20

1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 Birthyear Data from the IPUMS public use microdata samples of Population Censuses from 1940 to 2000. College FIGURE3. FEMALEMINUS MALE COLLEGE ATTENDANCE attendance/graduation rates are similar in an era when AND GRADUATION BIRTH 1877 TO 1974 RATES: COHORTS, very few people went to college and diverge when men increaseThe their educational attainment. From 1950of Notes: data are the fraction birth underlying four-year cohorts onwards, women increase their college attandance attendees or college much fastern than men.graduates by birth cohort and sex

adjusted to 35 years of age for the U.S. born. College those with 16Economic or moreHistory completed years of

Matti Sarvimäkiare graduates

1930

1940

1950 Birthyear

1960

FIGURE 4. MEDIAN AGE AT FIRST MARRIAGE

COHORTS OF FEMALE COLLEGE GRADUATE

ATTENDEES: 1931 TO1968 BIRTHYE

Notes: Three-yearcentered moving averages a Sources: Current

Population Survey; Fertility Marriage, family and work 12 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

Median age at first marriage Goldin (2006, AER P&P)

AND PROCEEDINGS

MAY2006

27 26

At the same time, “the median age at first marriage increased by an astounding 2.5 years for female college graduates born between 1949 and 1956 [...] With a later age at first marriage, women could take college more seriously. [...] Although some aspects of college social life did not differ much across these generations, the pressure to meet a spouse while in college diminished considerably.”

- Some college - College graduate

25 24 marriage first at 23 age 22 Median 21 20

0

E

r x e

1930

1940

1950 Birthyear

1960

1970

Data from the Current Population Survey’s Fertility and Marital History Supplement, 1990 andMARRIAGE 1995. FIGURE 4. MEDIAN AGE AT FIRST FOR BIRTH COHORTS OF FEMALE COLLEGE GRADUATES AND

ATTENDEES: 1931 TO1968 BIRTHYEARS Notes: Three-yearcentered moving are shown. averages Matti Sarvimäki Economic History

Marriage, family and work

13 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

% women in professional programs Goldin (2006, AER P&P) RICHARDT. ELYLECTURE

VOL.96 NO. 2

0.5

ate levels of human investmen Women “also began to close the gap capital withpossible men with regardwhy to college majors returns to job ex reason [which] shifted for fromwomen those that were to me relative increased "consumption"reasons those thatantidiscr possible related toinclude were "investment" related. Women also laws and governmental interventions t began to further their education in them. professional and graduate schools around 1970.”

Medical Law Dentistry MBA

0.4

0.3

female

0.2 Fraction 0.1

0 1995 1955 1965 1975 1985 Yearof professionalschool entry See the paper for data sources.

2005

FEMALEAMONGFIRST-YEAR FIGURE5. FRACTION STUDENTS IN PROFESSIONAL PROGRAMS: 1955 To 2005

Sources: First-yearlaw studentsfrom the AmericanBar AsEconomic History site:

Matti Sarvimäki sociation Web

Altered Identities.-The revolution be seen in the changed outlook of wom cerning their individual identities. As married later, they could "make a n themselves before having to choose t their name. In the 1970s, and continu 1980s, more women retained their upon marriage, particularlyamong th had advanced degrees. Virtually all women took their husband's name in Marriage, and work 14 of / 28a about 20 1970s.family 1990

Model of labor supply

Evolutions

e -

4 . y

y r n

Efficiency

The Pill

The War

Gender differences in personal satisfaction factors Goldin (2006, AER P&P)

AND PROCEEDINGS

, -

The Quiet Revolution

MAY2006

“The revolution can also be seen in the changed outlook of women concerning their individual identities [...] In the 20 Survey of American Freshmen, females increased the weight they placed on weight recognition by colleagues and financial 10 Recognition success; males increased their relative female by colleagues weight on family. By the early 1980s minus men and women gave about equal 0 weight to recognition and family” [...] Male Family “Women have added identity to their decision about whether to work or not -10 to work given changes in wages and incomes. As a consequence women 1965 1970 1975 1980 1985 1990 1995 2000 Freshmanyear have become stickier in their labor force Data attachment” . from the Survey of American Freshmen 6. PERSONAL FIGURE SATISFACTION FACTORS FORCOLLEGE BYSEX:1966 To 2000 DIFFERENCES FRESHMEN, Financialsuccess

Notes: Individualssurveyedwere freshmen.The data given Economicrepresentative History produce a nationally college

areSarvimäki Matti weighted to

Marriage, family and work

15 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

Gender gap in earnings Goldin (2006, AER P&P) VOL.96 NO. 2

RICHARDT. ELYLECTURE 0.75

80

“The result of expanded horizons and Teachers,nurses,librarians,social workers,e altered identities was that younger cohorts 0.60 of women were considerably better prepared to enter the labor market and were determined to have 0.45 These changes are reflected in careers. their occupations and earnings relative to those of men”

75

70

65

0.30

60

0.15

55

0.00

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 Based on median earnings of full-time, year-round workers 15 years old 7.andWOMEN'S over. FIGURE EARNINGS AS A PERCENTAGE OF

MEN'S EARNINGS:1960 To 2003

Doctors,lawyers,professors,manager

1940

1950

1960

1970

1980

19

FIGURE 8. OCCUPATIONS OF COLLEGE GRADUAT

30 To 34 YEARSOLD:1940 To 2000

Notes: The occupationsin the two groups are:g Notes: Based on median earnings of full-time, year-round teachers, nurses, librarians,social or religious w of the 15 old and over as of March workers following Matti Sarvimäki years Economic History Marriage, and work 16 docto / 28 retariesfamily and other clerical workers; and

Model of labor supply

Evolutions

The Quiet Revolution

The Pill

The War

Occupations, college graduated women at 30–34 Goldin (2006, AER P&P)

DT. ELYLECTURE

5

Efficiency

13

0.75

“Occupations shifted, not surprisingly, from those that had been considered traditional ones for women, such as teacher, nurse, librarian, and social worker, to a varied group of professions including lawyer, physician, professor, and manager”

Teachers,nurses,librarians,social workers,etc. 0.60

0.45

0.30

Doctors,lawyers,professors,managers,etc.

0.15

0.00

1940

1950

1960

1970

1980

1990

2000

Data from the Integrated Public Use Micro-data Sample Census and FIGURE 8. CPS. OCCUPATIONS OF COLLEGE GRADUATE WOMEN,

30 To 34 YEARSOLD:1940 To 2000

Notes: The occupationsin the two groups are:grade school nd teachers, nurses, librarians,social or religious workers, secg Mattiretaries Sarvimäki Economicand History and other clerical workers; doctors,

Marriage, family and work

17 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

Fraction of years spent married Goldin (2006, AER P&P) AEA PAPERSAND PROCEEDINGS

14 0.85

0.8

0.75

0.7

0.65

0.6 1935

1940

1945

first marriage.40 the age at first “Marriage delay enabledAs women to take formal educationwomen more seriously led serio could beand more increased, Fractionof time marriedduringages: to changes in their to work. an independent for relationship future, lege, plan 25 to 40 years old Thetheir period divorce rate began to identities and fa before marriage 25 to 450years old increase in the 1960s. The combination 25 to 50 yearsold - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -. of the increase in divorce and the later ok IV. Has the all women RevolutionSta age at first marriage forQuiet meant that the fraction of their lives A. Is There a "Natural Rate" of F they would spend married plummeted Labor Forcebecame and economic independence Participation? more valuable [...] One of the reasons for theFemale increaselabor in theforce age at first rat participation marriage was the introduction ofare theno fraction full time working longe contraceptive "pill" 1950 1955 1960 1965 BirthYear

Data from CPS.

FIGURE9. FRACTIONOF YEARSSPENTMARRIED FORALL WOMEN

Notes: All education groups and all races are included.

Matti Sarvimäki

Economic History

let alone rising. Participationratesfor almost all ages, education levels, an statuses seem to have leveled off sin 1990 after rising nonstop for at leas century (Figure 1). The participati Marriage, family and work 18 / in 28 married women

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

Has the Quiet Revolution Stalled? Goldin (2006, AER P&P)

Participation rates have leveled off since around 1990 participation for women with infants may even have declined many wonder if some type of "natural rate" of female labor force participation has been reached

Goldin: changes in demographics explain these trends later age at marriage → delay of childbearing → more women in their 30s have small children than 25 years ago “despite this greater child burden, participation rates for women in their thirties are higher today than in the early 1980s”

For the rest of the story, see Goldin’s Presidential Address to the 2014 AEA Annual Meeting: A Grand Gender Convergence: Its Last Chapter Matti Sarvimäki

Economic History

Marriage, family and work

19 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

The allocation of talent and economic growth Hsieh, Hurst, Jones, Klenow (2016)

Unlikely that innate talent differ across genders, ethnic groups → misallocation of talent because women and non-whites historically not allowed to pursue their comparative advantage this paper: how large is the effect on aggregate productivity? estimate an augmented Roy model embedded in general equilibrium (elegant, but requires strong assumptions)

Matti Sarvimäki

Economic History

Marriage, family and work

20 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

The allocation of talent and economic growth Hsieh, Hurst, Jones, Klenow (2016)

Unlikely that innate talent differ across genders, ethnic groups → misallocation of talent because women and non-whites historically not allowed to pursue their comparative advantage this paper: how large is the effect on aggregate productivity? estimate an augmented Roy model embedded in general equilibrium (elegant, but requires strong assumptions)

Take-away 1/4 of growth in aggregate output per person in 1960–2010 can be explained by the improved allocation of talent “The general equilibrium Roy model we use is a useful place to start, but it is possible that a different framework can do a better job. In addition, we have focused on the gains from reducing barriers facing women and blacks over the last fifty years. But we suspect that barriers facing children from less affluent families and regions have worsened in the last few decades. If so, this could explain both the adverse trends in aggregate productivity and the fortunes of less-skilled Americans in recent decades.” Matti Sarvimäki

Economic History

Marriage, family and work

20 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

The Power of the Pill Goldin, Katz (2002, JPE)

Question did the availability of effective birth control alter women’s career plans and their age at first marriage?

Research design the pill became available for young, single women at different times across states → dif-in-dif

Results later age at first marriage greater representation in nontraditional, professional occupations among college educated women

Matti Sarvimäki

Economic History

Marriage, family and work

21 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

The Power of the Pill: Research design Goldin, Katz (2002, JPE)

TABLE 2 State Laws Regarding Contraceptive Services to Minors and the Age of Majority, 1969–74 Earliest Legal Age to Obtain Contraceptive Services without Parental Consent

Age of Majority State

Matti

Ala. Alaska Ariz. Ark. Calif. Colo. Conn. Del. D.C. Fla. Ga. Hawaii Idaho Ill. Sarvimäki

1969 (1) 21 19 21 18† 21 21 21 21 21 21 21 20 18† 21

1971 (2) 21 19 18 18† 21 21 21 21 21 21 21 20 18† Economic18 History

1974 (3)

1969 (4)

1971 (5)

1974 (6)

21 19 18 18† 18 21 18 18 21 18 18 20 18 18

21 19 21 18 15 21 21 21 21 21 14 20 18 21 Marriage,

17 19 18 14 15 14 18 21 14 21 14 20 18 14 and

17 14 or 19* 18 14 15 14 18 18 14 14 14 20 14 14

family

work

22 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

The Power of the Pill: Results Goldin, Katz (2002, JPE)

744

journal of political economy

TABLE 3 State Laws and Pill Use among Never-Married Female Youths in the National Survey of Young Women, 1971 Dependent Variable: 1 p Ever Taken the Birth Control Pill

15–19 Years Old All (1)

Matti

Sexually Active* (2)

17–19 Years Old All (3)

Sexually Active (4)

17–19 Years Old and Attends College All (5)

Sexually Active (6)

Mean of dependent .0652 .245 .106 .304 .145 .406 variable State law (1pnonre.0232 .0807 .0422 .109 .0701 .128 strictive for (.00870) (.0280) (.0153) (.0372) (.0367) (.0889) minors) Age variables: Cross-sectional estimates using NSYW71 data. Treatment variable takes the value of 15 !.140 !.259 1 if the state of residence(.210) allows 16 (.0641) years or older to obtain the pill. Control variables: age,16education, current !.119 school attendance, !.175 religion, race, and census division. (.0186) (.0521) 17 !.0946 !.106 !.0730 !.0837 !.114 !.103 (.0163) (.0202) (.0470) (.0491) (.146) Sarvimäki Economic History(.0443) Marriage, family and work

23 / 28

TABLE 4

LawsResults and the Age at First Marriage for College Women (U.S The Power of the State Pill: Dependent Variable: 1pMarried before Age 23

Goldin, Katz (2002, JPE)

College Graduates (1) Mean of dependent variable Nonrestrictive birth control law at age 18* Pill access by age 17†

(2)

(3)

(4)

(5)

.41 .41 .41 .41 .41 !.0196 !.0162 !.0207 !.00986 !.0227 (.00737) (.00762) (.00920) (.00791) (.00917) [.0109] [.0105] [.00941] [.0107] [.00995]

!.0 (.0 [.0 !.0 (.0 [.0

Pill access by ages 18–20‡ Legalized abortion at age 18§

.4

!.0236 !.0114 (.00992) (.00956) [.0103] [.0103]

Estimates for γ and and π from the dif-in-dif specification Misy = αs + δy + Xisy β + Psy γ + Asy π + isy where Misy is a dummy for the individual i being married before age 23, Psy is a dummy for her state of birth having nonrestrictive birth control law at the time when individual i was 18 years old and Asy is a similar dummy for legal abortion. Col 3 also includes state-specific linear trends. Identifying assumption: changes in access to the pill do not coincide with other (unobservable) changes affecting marriage age.

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

The Power of the Pill: Results Goldin, Katz (2002, JPE)

TABLE 5 Impact of Pill Access and Abortion Legalization on Career and Marital Status for College Women, 30–49 Y (U.S. Natives Born 1921–60) Professional Occupation, Excluding Teachers, Nurses (1) Mean of dependent variable Fraction using pill before age 21*

.127 .0480 (.0275)

Fraction with pill access law before age 21† Average abortion rate from ages .0457 18 to 21‡ (.0230) Fraction with legalized abortion at age 18§

(2) .127 .00410 (.0142) .0236 (.0146)

Lawyer, doctor

Never Currently Currently Married Married Divorced (5) (6) (7)

(3)

(4)

.0141 .0352 (.00539)

.0141

.126

.749

.0916

.0159 (.00353)

.0608 (.0189)

!.00813 (.0230)

!.0596 (.0107)

.0306 (.00451)

.00255 (.00362)

.0431 (.0194)

Curr vorc M (8)

.104 !.0325 (.0257)

!.149 (.0215) !.0299 (.0236)

!.0127 (.0110)

“Improved pill access from the pre-1940 to the mid 1950s birth cohorts, according to columns 3 and 4, can explain an increase in the share of college women as lawyers and doctors of 1.2 (0.0352 × 0.35) to 1.6 (0.0159 × 0.98) percentage points as compared with an overall increase of 1.7 percentage points from 1970 to 1990.” In this calculation, 0.35 is the change in pill use and 0.98 the change in access to the pill. Matti Sarvimäki

Economic History

Marriage, family and work

25 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

The Power of the Pill Goldin, Katz (2002, JPE)

Why? Reduced the cost of professional education women did not have to pay the penalty of abstinence or cope with considerable uncertainty regarding pregnancy indirect effect: everyone could delay marriage → created a “thicker” marriage market for career women

“Other factors were involved in these changes, to be sure. No great social movement is caused by a single factor.”

Matti Sarvimäki

Economic History

Marriage, family and work

26 / 28

Model of labor supply

Evolutions

The Quiet Revolution

Efficiency

The Pill

The War

More power to the pill Bailey (2006, QJE)

Question impact of the pill on the timing of first births and extent and intensity of women’s labor-force participation among all women

Research design same as Goldin and Katz (2002)

Results reduced the likelihood of a first birth before age 22 increased the number of women in the paid labor force raised the number of annual hours worked

Matti Sarvimäki

Economic History

Marriage, family and work

27 / 28

Papers for essays Acemoglu, Author, Lyle (2004): Women, War, and Wages: The Effect of Female Labor Supply on the Wage Structure at Midcentury. JPE 112: 497-551 In states with greater mobilization of men, women worked more after the war and in 1950, though not in 1940. These induced shifts in female labor supply lowered female and male wages and increased earnings inequality between high-school and college-educated men.

Goldin (1991): The Role of World War II in the Rise of Women’s Employment. AER 81(4): 741–756 The 1940’s were a turning point in married women’s labor-force participation, leading many to credit World War II with spurring economic and social change. This paper argues that while the war had several significant indirect impacts on women’s employment, its direct influence appears to have been more modest.