Labor market transitions of young women over the early life course: A multistate life table analysis

H. S. Phang

Institute for Research on Poverty Discussion Papers from University of Wisconsin Institute for Research on Poverty

Abstract: Using detailed panel data on school, work, and family formation history of youth (i.e., NLSY 1979-1991), we examine the dynamic process of labor market transitions women make during young adulthood. Transitions between the states of the labor force (i.e., employment, unemployment, and out of the labor force) are analyzed using multistate life tables, in which labor market and family transitions are estimated simultaneously. The age-pattern, life-cycle variation, and racial differences in employment and nonemployment transitions are the main interests of this study. We find that black women in the aggregate are less likely to be employed (or in the labor force) and more likely to be nonemployed than white women during early adulthood (i.e., at ages 16-34). With first childbirth controlled, a higher proportion of black women than white women are in the labor force during the same period, as past studies have shown. But, we find that the proportion employed is actually lower among blacks than among whites because a higher proportion of blacks are unemployed. Even though the racial differential in employment decreases with age among women with more than a high school education, it persists among women with a high school education or less. By estimating the conditional probabilities of transitions between states of the labor force, this study shows that the major component of the racial differential in employment (or in nonemployment) is in the process of entering employment either from the unemployment or the out-of-the-labor-force state: black women, if in the labor force, are less likely to be employed and more likely to withdraw from the labor force, if unemployed, than their white counterparts. As a summary measure, our life table analysis shows that black women spend considerably more time nonemployed and less time employed than white women over the early life course.

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