Women,Wealth Effects, and Slow Recoveries

Masao Fukui, Emi Nakamura, Jón Steinsson

NBER Working Paper No. 25311
Issued in November 2018, Revised in August 2020
NBER Program(s):Economic Fluctuations and Growth, Labor Studies, Monetary Economics

Business cycle recoveries have slowed in recent decades. This slowdown comes entirely from female employment: as women’s employment rates converged towards men’s over the course of the past half-century, the growth rate of female employment slowed. But does the slowdown in the growth of female employment rates translate into a slowdown for overall employment rates? The degree to which women “crowd out” men in the labor market is a sufficient statistic for this question. We estimate the extent of crowding out across states, and find that it is small. We then develop a general equilibrium model of the female convergence process featuring home production and show that our cross-sectional crowding out estimate provides a powerful diagnostic statistic for aggregate crowding out. Our model implies that at least 70% of the slowdown in recent business cycle recoveries can be explained by female convergence.

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Acknowledgments

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Document Object Identifier (DOI): 10.3386/w25311