How did divorced women fare in the 1990s?: Analysis of work and hourly earnings

Abstract

This paper presents evidence of changes in employment and real wages in the population of divorced single women during the 1990s. Using data from the U.S. Current Population Survey (CPS) for 1989 and 1999, the paper estimates multivariate models of labor force participation and hourly wages for each year. Differences between years in employment and wages are decomposed into portions attributable to changes in measured characteristics and changes in coefficients of the models. Estimates indicate that full time employment remained virtually unchanged during the decade, and real wages increased by less than 2%. Decomposition of the regression models shows that measured characteristics in this population changed in a direction that would have lead to higher wage growth, but those changes were offset by changes in the model’s coefficients. The result is that earnings experienced only modest growth. In the labor force participation model, changes in measured characteristics worked in the direction of a modest decrease in full time employment, but again coefficient changes provided an offsetting effect.