Trends in female labor force participation in Sweden.

Abstract

The labor force participation of Swedish married women increased form 49.1% to 83.5% in the past 2 decades. Results from cross section analyses carried out on micro data from 3 standard of living investigations, done in 1968, 1974, and 1981, are used to predict changes over time. Women's real wages have increased over time more than men's real wages; in combination with estimated positve own wages elasticities, this change is the most important determinant of the increase in female labor supply. The labor force participation of married women ages 20-59 has increased from 49.1% in 1963 to 83.5% in 1982; the increase is especially large for women with children under 7. Over the decades 1920-1965, when real wages of woman increased more than real incomes of men, the labor force participation rates of married women increased even faster. From 1963-1981 a dramatic narrowing of the male-female wage gap occurred; most of the decrease is a result of factors other than the human capital variables accumulated at school and on the job. The effect of centralized collective bargaining and a strong union policy to increase low wages may be important explanatory factors. Generous parental leaves and subsidized day care may have an increasing effect on fertility; but instead, fertility has decreased, perhaps less than it might have done in the absence of such policies. By using individual cross section data from the 3 standard of living investigations, estimates of participation are performed. The own wage effects of the participation equation are positive and significant but decreasing over time. Important institutional changes between the sample periods are the extended parental leaves and the increased supply of government subsidized day care.