The Revolution in Women’s Employment in the Market—Posner

As Becker explains, female labor-force participation has grown markedly in the United States and in many, probably most, other countries as well. Among the contributing factors is not only the growth of jobs in service industries relative to manufacturing and construction, but also the fact that even in traditionally “masculine” occupations, such as heavy manufacturing and military service, many jobs have become physically less demanding. Other contributing factors are improvements in contraception, labor-saving devices in the household, fast food (as a substitute for food prepared in the household), and increased demand for jobs requiring a college education, though to some extent these developments are responses to increased female participation in the labor force rather than causes of that participation.

 

The increased returns to higher education are a boon for women, though not I think because they are intellectually superior to men. Rather, as Lawrence Summers was pilloried for pointing out (and lost his job as president of Harvard as a result), there appears to be a lesser variance in female than male IQs. Suppose that the average IQs of two groups are the same, but 50 percent of the members of one group have an IQ between 100 and 110 and only 45 percent of the members of the other group do (thus, since the average IQ of the two groups is the same, more members of the second group have IQs under 100 and above 110 than members of the first group do). And suppose further that 100 is the minimum IQ one needs to graduate from college. Then, assuming the same returns to a college education for persons of identical IQ in the two groups, there will be more college graduates in the first group than in the second.

 

Although I agree with Becker that the most important factors that have influenced female labor-force participation are economic, politics has also played a role, though not necessarily a positive one. Female labor-force participation has been subsidized, in effect, by laws forbidding discrimination on grounds of sex but permitting affirmative action in favor of women, by laws requiring equal pay for equal work, by laws forbidding discrimination on grounds of pregnancy, and by the federal family-leave statute. Yet these laws may have done little, or even nothing or less than nothing, to increase the employment of women, since by making it more costly to employ women they reduce employers’ demand for them.

 

Although women’s average earnings are not yet equal to men’s, this appears to be due mainly to the fact that women spend less time in the workforce than men and as a result accumulate less job-related human capital (earning capacity based skills and experience). They spend less time in the work force because they spend more time in household production, including child care, than men do. A disparity in average earnings caused by a preference for another kind of “work” should not be considered discriminatory.

 

In allocating time between the market employment sector and the household sector, women (men for that matter as well) consider the relative private benefits, which include any benefits to a woman’s child that are part of her utility function. Since most parents are not perfectly altruistic toward their children, it is possible that increased female participation in the labor force disserves children. The reduction in the number of children of high-IQ parents because the mother is heavily invested in a career may also impose a social cost. In addition, female labor-force participation may be to a degree “involuntary” in the following sense: as women’s job opportunities have increased, judges have been reluctant to award generous alimony to divorced women. In conjunction with the rise of no-fault divorce, women’s household “job security” has diminished, reducing the return to household production, a reduction that may reflect legal and cultural changes rather than a change in relative economic value of household and market production. The birthrate has fallen not only because the opportunity costs of children, in the form of market earnings forgone because of time spent in child care, have increased for women as their job opportunities have improved, but also because women increasingly find it necessary to establish themselves in a career before having children, because they cannot count on support by a husband in the event of divorce. Postponement of child bearing reduces the number of children that a woman is likely to have.

 

Notice finally how the migration of women from household to market jobs exaggerates economic growth, because market earnings are counted as part of GDP but household "earnings"--the value of household production--are not.

 

I conclude that there is no airtight basis for cosidering increased female labor-force participation an unalloyed good.