Female Labor Supply in the United States

The expansion of 'family-friendly' policies, including parental leave and part-time work entitlements in other OECD countries, explains nearly 30 percent of the decrease in U.S. women's labor force participation relative to these other countries.

In 1990, U.S. women's labor force participation rate (LFPR) was 74 percent, sixth highest among 22 economically advanced countries. By 2010, it had risen slightly to just over 75 percent, while the LFPR of women in other economically advanced countries had increased substantially, from 67 to nearly 80 percent, on average. As of 2010, U.S. women ranked 17th in LFPR out of these 22 countries.

Unlike the United States, many other of those countries have enacted an array of policies designed to facilitate women's participation in the labor force, and such policies have expanded on average over the last 20 years relative to those of the United States. In Female Labor Supply: Why is the U.S. Falling Behind? (NBER Working Paper No. 18702), authors Francine Blau and Lawrence Kahn study the role of such policies in explaining the decline in U.S. women's relative position in labor force participation internationally. They also discuss some possible unintended side effects of these policies, including a reliance on part-time employment for women and lower female representation in high-level positions.

They find that the expansion of "family-friendly" policies, including parental leave and part-time work entitlements in other OECD countries, explains nearly 30 percent of the decrease in U.S. women's labor force participation relative to these other countries. However, family-friendly policies also appear to encourage part-time work and employment in lower level positions: U.S. women are more likely than women in these other countries to have full-time jobs and to work as managers or professionals. Moreover, the authors find that while more generous family-friendly policies raise women's employment, most of this effect comes from the expansion of part-time, rather than full-time, jobs.

These family-friendly policies also may lead employers to engage in statistical discrimination against women for jobs leading to higher-level positions, if employers are unable to predict which women are likely to avail themselves of these options and which are not. While the authors find that these policies may give women options that they would not otherwise have had, they also may leave women less likely to be considered for high-level positions.

--Lester Picker