The labor supply of Latinas in the USA: Comparing labor force participation, wages, and hours worked with Anglo and Black women

Abstract

This study explores the determinants of labor supply patterns among Latinas in the USA. We use recent microeconomic data from the Panel Study on Income Dynamics/Latino National Political Survey (PSID-LNPS) to estimate models of labor force participation, wages, and hours worked for a sample of Cuban, Mexican, and Puerto Rican women. We estimate the same models for Anglo and Black women in order to explore ethnic differences in the impact of characteristics affecting both the reservation and the market wage. We find that differences exist in the return to characteristics, such as education, but that there are also substantial differences in the levels of those characteristics across ethnic groups. The low wage rates and labor market activity of Latinas relative to Anglo and Black women are thus likely to be the combined result of lower investments in human capital and larger family size, the greater negative impact of macroeconomic conditions, and a stronger responsiveness to wages. Among Latinas, we find that there are differences in labor market outcomes between national origin and nativity groups. We also find that age at arrival and years in the USA play a role in labor supply, and that this is particularly true for Puerto Rican women.