Academic journal article Economia

Deceleration in Female Labor Force Participation in Latin America

Academic journal article Economia

Deceleration in Female Labor Force Participation in Latin America

Article excerpt

The strong increase in female labor force participation (LFP) is arguably among the most salient socioeconomic changes in Latin America in the last half-century. This fact not only implies a profound transformation in the daily life of millions of Latin American women and families, but also has substantial economywide labor and social consequences. Poverty, inequality, unemployment, and education-just to mention a few social issues-are all affected by a more intense entry of women into the workforce. Although remarkable, this long-run pattern of female gains has not been enough to close the gender gap. Gender equality in the labor market remains a difficult challenge in the region.

This paper explores a change in the trend of female labor force participation that makes the situation potentially more worrisome: after around half a century of sustained growth, there are clear signs of a widespread and significant deceleration in the entry of women into the Latin American labor markets. That deceleration took place even when the typical factors that account for the long-run increase in female LFP, such as innovations or expansions in health, home, and work technologies and some cultural changes, continued operating.2 The deceleration appears to have begun in the early 2000s, and it applies to all groups of women, but particularly to those who are married and in more vulnerable households.3 Therefore, the slower entry of women into the workforce has delayed the closing of the gap in labor participation not only between men and women, but also between vulnerable women and the rest.4 Although a similar pattern has emerged in other regions of the world, such as the United States since the 1990s, some Nordic economies, and some East and South Asian countries, the stagnation in female labor force participation is not a general phenomenon among developed or developing economies, which suggests that the recent deceleration observed in Latin America has regional origins that need to be explored.5

This paper makes two contributions to the literature on gender and labor participation in Latin America.6 First, we provide careful evidence on female LFP based on microdata from a large set of national household surveys. In particular, the paper unveils a potentially interesting fact, which has not yet been sufficiently highlighted: after several decades of steep and uninterrupted increase, the pace of growth in female labor force participation slowed substantially in the 2000s. We believe this changing scenario should be placed high in the research agenda, jointly with the traditional inquiry on the causes of the long-run increase in female participation.

Second, the paper delves into various alternative hypotheses on the contrast between the rapid growth in female labor force participation in the 1990s and the deceleration in the 2000s. Identifying causal relationships for complex socioeconomic variables in a large geographic region is extremely difficult. The evidence shown in this paper is not conclusive, and it admits of alternative explanations. Our preferred interpretation of the existing body of evidence is that the fast economic growth experienced by the region in the 2000s was an important-although not the only-determinant of the deceleration in female LFP. Lower unemployment and higher wages of other income earners in the household (mostly male partners), plus increased social assistance, may have reduced the pressing need for vulnerable women to take low-quality jobs.

The rest of the paper is organized as follows. In the next section, we briefly describe the data and present the basic evidence of deceleration in female labor force participation in Latin America. We then estimate the contribution of changes in the distribution of different variables to the observed changes in female LFP based on decomposition exercises. Subsequently, we argue that the hypothesis that the deceleration is the result of female LFP approaching a ceiling is not very plausible, and we present our preferred hypothesis linking the deceleration to the fast economic growth experienced by the region in the 2000s. …

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