Mothers labor force participation

Here’s something that I pulled together at work, and then wound up cutting from the document I did it for.  So I thought I’d share it here. 

This chart (from the new Indicators of Welfare Dependence report, issued by my old friends at HHS) shows the trends in labor force participation of married vs. divorced/separated/widowed vs. never-married mothers over the past 30 years.

labor force participation of mothers by marital status

I think it’s pretty remarkable how sharply the line for the never married mothers goes up in the 1990s.  So, what’s going on here?

Before turning to the question of why never married mothers labor force participation (LFP) rose so much during the 1990s, it’s first necessary to consider why it didn’t rise before the 1990s.  Another way to think of this question is to ask why did the labor force participation of married mothers rise during this period, and why didn’t the same factors increase the labor force participation rates of never married mothers (at least until the 1990s).

  • One reason that labor force participation rates increased for married women is that women now have greater potential wages, which make paid labor more attractive.  Women are both more educated and more experienced than they used to be, and blatant labor market discrimination is far less common, opening many lucrative career options to women.
  • However, these economic explanations only go so far; a key part of the story is changing societal norms that have made continued employment by married mothers, regardless of economic need, far more common.  As Blank and Shierholz comment, the effect of marriage itself on women’s labor force participation “virtually disappeared over time.”

What about divorced mothers?

  • Same arguments as for married mothers, plus:
  • Lack of alternative resources makes for lower reservation wages.
  • Among more skilled women, single parenting has a positive effect on labor supply – true in both 1979 and 2003 (Blank and Shierholz)

So why didn’t the LFP for never married mothers rise in the 1980s?

  • On average, younger, less educated than divorced mothers, so potential wages are much lower – may not equal the cost of child care or other lost benefits.
  • In addition, the “child penalty” on LFP rate is higher for younger mothers, and less educated mothers, even when children are the same age (Boushey)
  • Welfare provided a meager alternative to low-wage work – not a great living standard, but possible to eek by.  Kathy Edin’s work showed that low-wage work often didn’t provide any more disposable income.
  • Welfare policies provided large incentive to keep all earnings off the books.
  • In 1979, but not 2003, less skilled single moms were less likely than comparable childless women to work (Blank and Shierholz) – may be capturing the effects of welfare policy

What happened in the 1990s?

  • Strong economy led to employment expansions for most low-income workers – male and female, parents and non-parents.
  • EITC expansion greatly increased the returns to work in the formal sector for low-income parents – studies have shown that the effect was concentrated on single mothers.
  • Time limits and work requirements largely removed the alternative of choosing full-time parenting over low-wage work for welfare recipients, even for parents of young children. Just between 1996 and 1999, the employment rate for single mothers under 200 percent of poverty with a child under the age of 6 increased from 44.4 percent to 58.5 percent.  (TANF 7th annual report, page IV-33).
  • Work supports reduced the cost of going to work – child care, SCHIP, expanded earnings disregards.
  • Rate of increase in LFP did increase for divorced women, but not as sharply as never-married women.
  • Some of the increase in employment among never married mothers is likely due to composition effects – with declining teen birth rates, increases of overall non-marital birth rates, never married mothers are more likely to be older, more educated.

And in the 2000s?

  • Weaker economy reduced both employment and LFP for all types of workers
  • But married women’s LFP peaked in 1997, when economy was still booming – suggests that recession isn’t the whole story .  May be due to substitution with husbands’ earnings (although women’s LFP has become far less affected by husband’s earnings over time.)  (Blau and Kahn)
  • Divorced women’s LFP peaked in 2001; never-married women’s LFP in 2002; single mothers under 200 percent of poverty in 2000.

5 Responses to “Mothers labor force participation”

  1. K Says:

    Quick question – does this only count full time work or does it also include part time work? (My apologies if you already said this and I missed it!) Very interesting trend in the non-married working females.

  2. Elizabeth Says:

    Labor force participation means either working (full or part-time) or actively looking for work. Employment numbers are a little lower, and drop more in the 2000s, but show the same overall trends.

  3. jen Says:

    I hate to sound like Tom Friedman, but I am convinced that the recent married LFP trend is due to globalization.
    Elizabeth, you may have originally pointed out that an intact marriage is of itself a marker of middle-class-dom these days. I am making some assumptions about who falls into that married mother category, namely that they’re more likely to be middle class, and that they and their spouses are (or were, when they were working) knowledge workers.
    Next data point: I can’t help but notice that married-mother LFP numbers peaked immediately prior to the point when the internet started enabling globalization of knowledge work. One school of thought would be that “virtualization” of work would make it easier for people to wedge it in around their personal commitments. But in reality it’s actually just made it easier for employers to squeeze more out of their employees, as there is always the threat that the work can be outsourced overseas for less. One of the biggest ways American workers have fended off this threat is by working longer hours for the same pay. They typically can’t cut their salary, but they in essence cut their hourly rates by staying later and helping their employers avoid hiring additional people.
    All of this leads directly to longer working hours on the part of the middle class. Married women who stay in the workforce experience it just as much as their husbands. The strain on time brings with it increasing difficulties in keeping the home front pulled together. Which seems to put the whole thing over the tipping point for more and more families, and lead one spouse to give up on the workplace.
    This is my theory, anyway. Am I missing something?

  4. bj Says:

    Hi Elizabeth:
    I think that some of your statements for the 1990′s are going over my head. I think some of the statements refer to the changes in the “welfare” laws (that might not be the appropriate term) that “forced” folks to return to work, but I don’t understand acronyms like EITC (earned income tax credit?).
    The question motivated by my comment is whether you attribute the changes in work-force participation among never-married mothers to the changes in the “welfare” (I think another word is more accurate there) laws.
    Jen — regarding your globalization idea. I agree that one of the impacts of globalization is to require a larger percent of workers to be “ideal” workers (one of the characteristic of which is people who commit to getting the job done as their first priority), because the work done by others is sent elsewhere, and managed by the “ideal” worker. Women who have partners who earn the bulk of the family income have a “higher reservation wage” to use Elizabeth’s jargon, and thus are less likely to be ideal workers for the wage their offered (or any wage). But, I’m not sure I see a trend there — that is, it doesn’t look like married mother’s labor force participation decreases, only that it plateaus.
    bj
    bj

  5. Elizabeth Says:

    bj, yes, the EITC is the Earned Income Tax Credit, which is a refundable tax credit that only people with earned income (but under a certain amount) can get.
    The paper that I had pulled this together for is about the impacts of welfare reform on employment outcomes, and I did this precisely to try to sort out whether I think welfare reform is responsible for the increase. I think the EITC and the expansions in child care and health insurance were probably bigger than welfare reform per se, but I think the combination was very powerful.

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