A Study of U.S. Employment Rates with Emphasis on Gender Considerations

P olicymakers who are concerned with understanding the cyclical state of the economy will be interested in identifying the sustainable rate of employment growth. If productivity growth is taken to be exogenous, the rate at which jobs are created will determine growth in output. Assuming that employment is measured reasonably well, a policymaker armed with a measure of trend job growth will be able to glean information about the economy’s status from the monthly employment report. When attempting to determine this trend rate, one might posit as a first approximation that employment growth should be equal to the growth rate of the population. At the very least, this assumes that the fraction of the population employed will remain constant over time. However, a cursory look at U.S. data reveals that this fraction has been rising persistently over the postwar period. A robust determination of the sustainable rate of job creation should therefore take account of this trend. Upon further inspection of the available data, it becomes apparent that the driving forces behind this process have been demographic trends, i.e., the “baby boom,” and, to a larger extent, the increased participation of women in the labor market. In this article we focus our attention on the latter determinant. Female employment, expressed as a fraction of the working age population, has been increasing steadily over the past 50 years. While most work in this area has focused on the socioeconomic factors underlying this phe-