A new working paper from authors Raquel Fernandez and Joyce Cheng Wong highlights the stark differences in the lives of two generations of American women: those born in 1935 and those born just 20 years later in 1955. The authors found that education, wage structure and divorce were the main causes to changes in labor force participation.
From the abstract:
Women born in 1935 went to college significantly less than their male counterparts and married women’s labor force participation (LFP) averaged 40% between the ages of thirty and forty. The cohort born twenty years later behaved very differently. The education gender gap was eliminated and married women’s LFP averaged 70% over the same ages… We find that the higher probability of divorce and the changes in wage structure faced by the 1955 cohort are each able to explain, in isolation, a large proportion (about 60%) of the observed changes in female LFP.
Between 1935 and 1955, women tripled their presence at universities. Divorce rates also rose, which hurt women more than men, since it was the women who usually ended up with children, putting them under more financial and emotional stress. This heavier burden, the authors argue, also drove women to increased levels of education, to make themselves more robust candidates in the workforce.
The increased probability of divorce faced by the 1955 cohort, in particular, is a key driver of the increase in women’s work and it produced the desired asymmetric reaction in the education choices of men and women, helping to reduce the education gender gap significantly. Furthermore, changes in divorce probabilities alone account for around 60% of the LFP increase during the ages of 25-40 for married women.
Despite the economic and educational strides made by the 1955 generation, the irony is that most of them were not better off, and some (the least educated) were in fact worse off economically than their 1935 counterparts.
Conditional on education level, men greatly benefited from the changing economic environment, whereas both high school and college women lost from those changes. However, once we allow female preferences for work to change, college women also enjoyed small welfare gains in the 1955 world. High-school women on the other hand remained worse off. An ex ante welfare analysis (i.e., unconditional on education) revealed that both women and men fared better in 1955. Men’s welfare gains, however, are substantially larger than those of women reflecting, in large part, the asymmetric gender costs of divorce.~