Understanding the Rising Trend in Female Labour Force Participation

Nicolas Hérault and Guyonne Kalb

No 13288, IZA Discussion Papers from Institute of Labor Economics (IZA)

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, for the first time, the role of tax and transfer policy reforms as well as three other factors that have been shown to matter by earlier studies. These are (i) changes in real wages, (ii) population composition changes, and (iii) changes in labour supply preference parameters. 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: tax-transfer policy; employment rate; female labour force participation; behavioural microsimulation; decomposition (search for similar items in EconPapers)
JEL-codes: H31 J22 J31 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2020-05
New Economics Papers: this item is included in nep-lma
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Citations: View citations in EconPapers (1)

Published - published in: Fiscal Studies, 2022, 43 (4), 341-363.

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Related works:
Journal Article: Understanding the rising trend in female labour force participation (2022)
Working Paper: Understanding the rising trend in female labour force participation (2020)
Working Paper: Understanding the rising trend in female labour force participation (2020)
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