_5_ between 1965 and 1989.11 Per capita GDP was also lower in 1985 than it was in 1981 in another 15 countries out of the additional 27 countries in the region for which information exists."<sup>2</sup> An explanation for the apparently diverse experience betwcvn Latin America and the group of industrialized countries may be the expanding opportunities for employment in the public sector -- a traditional employer of female labor. It is therefore possible that the expansion of the public sector has in turn retarded the growth in the region."<sup>3</sup> Unfortunately the paucity of historical data with respect to the important distinction between private versus private employment does not allow us to pursue further this reasoning.

Could women's h-gher participation rates in the more recent period be the result of the "added worker" effect? This effect sugge3ts that more women (or, more appropriately, more secondary workers) enter tthe labor market during periods of economic recession in an attempt to preserve family income and the level of household consumption. In contrast, the "discouraged worker" effect suggests that women drop out of the labor force during periods of recession because expected retums to search are low: wages are depressed and the probability ot finding employment is small. We do not think that either effect has much to do with the observed rise in female participation in the region, even more so for the dominance of the added worker effect over the discouraged worker effect. There are three reasons for this belief. First, both the added and discouraged worker effects are operating at the margin and relate to cyclical, not long-term, variation. Our observation period is long enough for the task in hand so that any cyclical effect should not be sufficiently strong to distort the overall picture. Second, empirical studies have consistently found that in the case of women, the discouraged worker effect is the dominant one. One of the reasons for this is that during an economic recession women leave employment and become economically inactive in contrast to men who move from employment to unemployment. Or they may switch more to home-based work which may be outside the formal sector. Another reason is simple arithmetic: the added and discouraged worker effects operate basically on the percentage of the labor force who are unemployed and who usually constitute a small percentage of the total labor force. Hence, the broad trends in participation rates are primarily determined by the, say, 80 or even 90 percent of the labor force who are in employment. Third, and finally, the drop in the participation rates of younger women is not compatible with a dominant added worker effect.'<sup>4</sup> We, therefore, conclude that the rise in female participation that our data suggest for the post-war period is due to an underlying trend and cminot be attributed to the recession that hit the region in the eighties.

- **"** World Bank (1991, Table 1, pp. 4-5).

- **12** World Bank (1990, Table 1, pp. 4-5).

- 13 This assertion is made by Schultz (1990).

14 For example, Joshi (1981) found no evidence that women have a different degree of cyclical change in employment than men through specific groups of women andf men (such as the younger and pensioiiers) have markedly different trends of cyclical instability.