Formal sector job growth and women’s labor sector participation : The case of Mexico

Abstract

This paper looks at the effects of demand and supply on the determinants of labor sector (school, home work, informal, and formal) participation between Torreon and Tijuana, Mexico for married and single women. Comparisons between the two cities are used to capture differences in labor demand. Torreon is a traditional city with an agri-industrial base and Tijuana is a border city with large export processing ( maquiladora) and tourism sectors, both of which demand female labor. Factors influencing labor supply include both individual and household characteristics. Married women, given the strong cultural tradition of working in the home, do not significantly increase their paid labor participation with higher labor demand or changing characteristics of the household. Personal characteristics have the greatest impact on labor sector participation. Single women do, however, increase their formal sector participation with additional employment opportunities and respond to household needs by moving in and out of the paid labor market. Results indicate that increases in labor demand in Mexico from the NAFTA could expand formal sector labor force participation of single women.