The Effects of Local Labor Market Conditions on Labor Force Participation of Puerto Rican, White, and Black Women

Abstract

This article examines whether the differing impact of local labor market conditions may help explain differences in the labor force participation of Puerto Rican, White, and Black women. The authors' analysis, using the standard metropolitan statistical area (SMSA) as unit of analysis, indicates that White, Black, and Puerto Rican women are affected differently by earnings, unemployment, city size, industrial change, and other variables affecting the supply side of labor markets. In particular, White women are less responsive to income changes and more responsive to the discouraged worker effect when unemployment rises than are Black and Puerto Rican women. White women are not significantly affected by the size of the cities in which they live nor by changes in the regional demand for labor. In contrast, Black and Puerto Rican women are adversely affected by the size of the cities in which they live. However, Black women have not been affected by changes in the demand for labor, whereas Puerto Rican women seem to have been hurt by these changes. The differing impact of local labor market conditions may induce differences in the long-term trends in labor force participation for each of these groups.