Over the past 30 years, research on married women's labor force
participation has concluded vlrtua!ly without exception that the principal
source of labor force participation rate growth for married women has been
the concurrent growth of women's real wages. The experience of the 1970's
suggests, however, that real wage growth cannot account for the Increase
In participation rates that occurred during that period. This paper
argues that an Important determinant of married women's current
participation decisions is the level of uncertainty associated with
expectations of future wages, and that high levels of uncertainty during
the 1970's may have contributed sUbstantially to the growth in
participation that occurred during that time. Engle's model of
autoregressive conditional heteroscedastlclty (ARCH) Is appl led to
aggregate time series data covering the years 1956-1986 to measure the
level of uncertainty at each point In time. Our estimates Indicate
support for the basic hypothesis that the level of uncertainty is an
important determinant of labor force participation decisions for married
women.
*Published:
Economic Inquiry, October 1991.
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