WHY ARE U.S. WOMEN DECREASING THEIR LABOR FORCE PARTICIPATION IF THEIR WAGES ARE RISING?

Abstract

Given the traditional interpretation of women's labor force participation rate (LFPR) trends as movements along a positively sloped labor supply curve, it is surprising that the recent downward trend in U.S. women's LFPR has occurred over a period when women's real wages were commonly believed to be rising. I find that almost two‐thirds of the decline since 2000 is attributable to aging of the adult female population. The remainder, due to declining labor force participation for women under 55, becomes less puzzling in light of my evidence that the wage/education locus faced by women actually may have worsened since 2000. (JEL J21, J31, J82)