Female Employment and Structural Transformation

Barbara Petrongolo and L. Rachel Ngai

No 520, 2012 Meeting Papers from Society for Economic Dynamics

Abstract: The rise in female participation to the labor market and the labor reallocation from manufacturing to services are two of the most remarkable stylized facts of the post-war period. Motivated by these facts, we propose a model of labor allocation across three sectors: goods, services and home production, in which women have a comparative advantage in the production of services, both in the market and in the household. Productivity growth is faster in market sectors than in home production, and, within the market, it is faster in manufacturing than in services. Goods and services are poor substitutes, which gives rise to structural transformation. On the other hand, market services are good substitutes to home production, which drives marketization. Realistic differences in productivity growth across sector can predict an important share of the rise in women's market hours, the rise of services in the economy and the marketization of home production.

Date: 2012
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