A Note on the Supply of Female Labor

Abstract

THIS note 1 deals with the measurement of the supply curve of female for the economy as a whole. It is not to be interpreted as a study of the supply for particular industries or occupations. In I940 for the first time the Bureau of the Census included data on wages and salary incomes in its Census of Population. The concept of labor was substituted for Earnings data were classified by sex. These changes in the presentation of population statistics made the measurement of the supply curve of easier and less open to doubt on the grounds of inadequacy of the basic data than was the case in the work of Paul H. Douglas.2 Both in his book and in his and Mrs. Schoenberg's article, the series representing wages was based on earnings in manufacturing. The average annual earnings in manufacturing in 4I cities were correlated with the proportion of the population gainfully employed. This procedure assumed that earnings in other industries bore the same ratio to those in manufacturing in all of the cities. With the Census now reporting frequency distributions of wages classified by size for each of the major cities, the assumption is no longer necessary. Douglas and Schoenberg found a negative relationship between numbers of women and children employed and average earnings. Since it was quite conceivable that instead of women seeking employment due to low incomes, the average earnings were low because a large number of women were employed, the authors adjusted the earnings series to measure the wages an equivalent adult male would receive. The correction was based on the ratio of men's to women's wages in each state as reported in a number of industries. They also found in each state the proportion of the employed who were women. The manipulation of the series in this way is no longer necessary, for the earnings data are classified by sex. Some bias in the earnings figures are still present because of the inclusion of those of children, but the number of children employed was not large enough to reduce the accuracy of my findings significantly. In previous Censuses, persons gainfully employed were defined as having an occupation, regardless of whether they were currently employed, available for employment, or neither of these. In I940 the force was defined by the Bureau as consisting of persons at work, seeking work, or on public emergency work in the week of March 24 to 30, I939. The figures excluded workers unemployed due to seasonal layoffs, who were not seeking work. Retired persons were also excluded. Neither of these groups at the time of the Cefisus was effectively a part of the supply. Under the former classification, however, many of them would have been reported as gainfully employed, since they would have given an occupation in answer to the questionnaire. The latest Census also excluded inmates of penal and mental institutions, who previously would have been considered gainfully employed because they worked regularly. For my purpose, this is an improvement, inasmuch as it is difficult to conceive of such inmates being available for other employment.3 Included in the force are new workers, without previous experience, seeking employment. In I930 new workers would probably not have reported occupations and thus would have been omitted. Entrepreneurs were included both in the I930 and the I940 series on labor. Since most of 1 I am indebted to Professors Milton Friedman and George J. Stigler for discussions on the methods used in this paper. 2Paul H. Douglas, The Theory of Wages (New York, I934); Erika H. Schoenberg and Paul H. Douglas, Studies in the Supply Curve of Labor: The Relation in I929 between Average Earnings in American Cities and the Proportions Seeking Employment, The Journal of Political Economy, February I937. Sixteenth Census of the United States (I940), Population, Volume iII, Part i, p. 3.