Understanding the rising trend in female labour force participation

Théorie des émotions et analyse économique: une revue

Nicolas Hérault and Guyonne Kalb
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Nicolas Hérault: BSE - Bordeaux sciences économiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, UQ [All campuses : Brisbane, Dutton Park Gatton, Herston, St Lucia and other locations] - The University of Queensland, University of Melbourne, Global Labor Organization
Guyonne Kalb: University of Melbourne, UQ [All campuses : Brisbane, Dutton Park Gatton, Herston, St Lucia and other locations] - The University of Queensland, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics

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Abstract: Female labour force participation has increased tremendously since World War II in developed countries. Prior research provides piecemeal evidence identifying some drivers of change but largely fails to present a consistent story. Using a rare combination of data and modelling capacity available in Australia, we develop a new decomposition approach to explain rising female labour force participation since the mid‐1990s. The approach allows us to identify the role of tax and transfer policy reforms as well as three other factors that have been shown to matter by earlier studies: (i) changes in real wages; (ii) population composition changes; and (iii) changes in labour supply preference parameters. For the first time, all these factors are identified through a single consistent decomposition framework. A key result is that – despite the ongoing emphasis of public policy on improved work incentives for women in Australia and elsewhere – changes in financial incentives due to tax and transfer policy reforms have contributed relatively little to achieve these large increases in participation. Instead, the other three factors drive the increased female labour force participation.

Keywords: Employment rate; Female labour force participation; Tax–transfer policy; Decomposition; Behavioural microsimulation; Microsimulation comportementale; Décomposition; Taux d'emploi; Participation des femmes au marché du travail; Politique fiscale et de transfert (search for similar items in EconPapers)
Date: 2022-12-12
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Published in Fiscal Studies, 2022, 43 (4), pp.341-363. ⟨10.1111/1475-5890.12313⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05455561

DOI: 10.1111/1475-5890.12313

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