Culture as learning
Subtitle: the evolution of female labor force participation over a century
By: Raquel Fernandez.
Contributors: National Bureau of Economic Research.
Series: NBER working paper series -- no. 13373.; Working paper series (National Bureau of Economic Research) -- working paper no. 13373.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 38
Subjects: Experiential learning; Women -- Employment -- United States -- Decision making; Labor supply -- United States
Description: Married women's labor force participation has increased dramatically over the last century. Why this has occurred has been the subject of much debate. This paper investigates the role of culture as learning in this change. To do so, it develops a dynamic model of culture in which individuals hold heterogeneous beliefs regarding the relative long-run payoffs for women who work in the market versus the home. These beliefs evolve rationally via an intergenerational learning process. Women are assumed to learn about the long-term payoffs of working by observing (noisy) private and public signals. They then make a work decision. This process generically generates an S-shaped figure for female labor force participation, which is what is found in the data. The S shape results from the dynamics of learning. I calibrate the model to several key statistics and show that it does a good job in replicating the quantitative evolution of female LFP in the US over the last 120 years. The model highlights a new dynamic role for changes in wages via their effect on intergenerational learning. The calibration shows that this role was quantitatively important in several decades.
Notes: "September 2007"

Includes bibliographical references (p. 35-38).

Also available in PDF from the NBER world wide web site (www.nber.org).