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Title: The Service Sector and Female Market Work: Europe vs the United States

Citation Type: Working Paper

Publication Year: 2013

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Abstract: This paper studies cross-country differences in female employment and market hours over time in the multi-sector general equilibrium model. The focus is two-fold: (1) to quantify the effect on the consumption of services and service sector employment from women entering the labor force, and (2) to compute the difference of hours worked between Europe and the United States from taxes, structural change and female employment. Increases in female employment, due to a closing gender wage gap and structural change, account for a sizeable portion of the rise in service consumption/employment. Cross-country tax differences are able to explain large sectoral differences across countries, which are reinforces by a lack of female employment. The key driver is the substitution of market-services for home production. Women, being less productive in sectors requiring brawn, have a comparative advantage in working at home or in the service sector compared to industry. High taxes disincetivize women from working in the market and service production remains at home, reducing demand for market-services, which feeds back into a smaller service sector and lower female market hours. Subsidies to female employment can circumvent the high tax effect, but lead to considerable welfare losses.

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Authors: Rendall, Michelle

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Publication Number: 312

Institution: University of Zurich

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Publisher Location: Zurich, Germany

Data Collections: IPUMS CPS

Topics: Gender, Labor Force and Occupational Structure

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