Female Labor Force Participation and Structural Transformation


Two secular trends have dominated changing labor markets in industrialized countries over the past decades. First, production shifted from manufacturing to services. Second, the share of female employment increased strongly. This paper documents a novel fact connecting these two trends. Despite the employment trends for females and across industries, the female employment shares within manufacturing and services have remained virtually constant. This fact holds for the United States, Germany, and France. Interpreting such a constant gender composition as technology induced implies that increasing labor supply of females causes structural change. We propose a stylized theory of gender-biased industry-specific technologies and calibrate it to the U.S. economy. Our results provide a novel interpretation of structural change where rising female labor supply is the cause, rather than a consequence, of structural change.

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