Say at home, or stay at home? Policy implications on female labor supply and empowerment

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Abstract

This paper develops a theory of female labor supply in a general equilibrium framework in the context of a developing economy. In stage 1, men and women decide whether to get married foreseeing the power and market dynamics in stage 2. Single people make their own decisions whereas married couples make decisions together, the power distribution among partners is determined endogenously. It is shown that female labor supply can take different shapes due to structural differences between economies and multiple equilibria might occur, causing low female labor force participation trap. As for policy implications, we find that tax-break to the employers can give a huge boost to female employment and may reduce the wage-gap. However, tax-benefit to women may widen the wage-gap although both these policies empower women. We also conclude that true empowerment should come with the freedom of choice (to work); increasing female labor force participation does not necessarily empower women. Results found here resonate well with previous empirical findings and suggest additional testable implications.

Original languageEnglish
Pages (from-to)1081-1103
Number of pages23
JournalReview of Economics of the Household
Volume15
Issue number4
DOIs
StatePublished - 1 Dec 2017

Fingerprint

labor supply
female labor force
empowerment
labor force participation
taxes
wage
women's policy
decision making leeway
economy
married couple
employer
market
Policy implications
Female labor supply
Empowerment
Tax
Wage gap
Female labor force participation

Keywords

  • Collective utility model
  • Female labor supply
  • Household equilibrium
  • Power
  • Women’s empowerment

Cite this

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abstract = "This paper develops a theory of female labor supply in a general equilibrium framework in the context of a developing economy. In stage 1, men and women decide whether to get married foreseeing the power and market dynamics in stage 2. Single people make their own decisions whereas married couples make decisions together, the power distribution among partners is determined endogenously. It is shown that female labor supply can take different shapes due to structural differences between economies and multiple equilibria might occur, causing low female labor force participation trap. As for policy implications, we find that tax-break to the employers can give a huge boost to female employment and may reduce the wage-gap. However, tax-benefit to women may widen the wage-gap although both these policies empower women. We also conclude that true empowerment should come with the freedom of choice (to work); increasing female labor force participation does not necessarily empower women. Results found here resonate well with previous empirical findings and suggest additional testable implications.",
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Say at home, or stay at home? Policy implications on female labor supply and empowerment. / Atal, Vidya.

In: Review of Economics of the Household, Vol. 15, No. 4, 01.12.2017, p. 1081-1103.

Research output: Contribution to journalArticleResearchpeer-review

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