Date of Award

5-1-1990

Degree Type

Thesis

Degree Name

M.A.

Department

Department of Economics

First Advisor

Dr. Charlie Carter

Abstract

This study examines the impact of labor force participation rates of married women with a spouse present in the United States. The study covers the period from 1956 to 1983. The population was divided into five age groups (twenty to twenty-four, twenty-five to thirty-four, thirty-five to forty-four, forty-five to sixty-four and sixty-five plus). The study argues that the aspiration level of a given household, which is represented by relative income, was an important factor in causing adult women to join the labor force. On the other hand, the influx of younger workers from the baby boom generation, coupled with large numbers among adult women, depressed money wage, thereby causing relative income to decline over time. In effect, the decline in relative income induced many married women to enter the labor force. Fertility rates dropped and as a result many women delayed their childbearing. Regarding the influence of unemployment, the discouraged worker argument was useful at explaining entry and exit of younger workers, while the additional worker theory helped to explain entry and exit of adult women into the labor force. The unemployment rate variable was introduced in our model to capture the cyclical effects on labor force participation. Though the latter variable did not appear to be significant in our estimates, it was intended to improve the model. The age-sex median income of males relative to forty-five to fifty-four years old variable was significant. From relative income variable, we concluded that the decline in relative income of a given household was important in inducing married (adult) women to join the labor force to supplement the lost income. The primary emphasis of this study is to examine the empirical consequences of a shift in relative earnings on labor force participation rate of females in those households for which males relative earnings have declined. More specifically, this thesis argues that the earnings of younger workers relative to incomes of their older counterparts (a proxy for aspiration income) would encourage younger males to undertake efforts to offset this decline by increasing labor force participation of their spouses. In short, one would expect to witness an increase in the number of multi-earner households in the younger age groups.

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