The LFPR rate of young women in the three economies varies over a 6 pp range – from 61 percent in Panama to 55 percent in El Salvador. Columns (7) and (8) show that the LFPR in Costa Rica declines by 14-16 pp when I supplant the present barriers and preferences with their past values. The effect is significant from a historical perspective. Columns (9) and (10) report the actual change over the decades that ranges between 11-23 pp. A quantitatively opposite change materializes in the other two countries. According to the model, the same exercise leads to a 32-35 pp and 17-19 pp expansion in LFPR of El Salvador and Panama respectively. The preference channel is instrumental in driving the aggregate change in Costa Rica and El Salvador. Its effect is also non-trivial in Panama. The dominance of the channel contrasts with the earlier output exercises where it played a secondary role.

The magnitude of change in the LFPR of young men is much smaller. The joint effect of the three channels lifts the rates by 0-1 pp, 6-7 pp, and 2-3 pp in Costa Rica, El Salvador, and Panama respectively. The human capital channel drives the shifts in Costa Rica and Panama. However, like for women, it is the changes in preferences that generate the maximum impact in LFPR of men in El Salvador.

Factors that lead to an increase in the participation of women might reduce that of men. An increase in women's labor supply will cause the wage rate in market occupations to fall relative to that of the home sector. The talent endowment of many men will not be able to support participation under the new wage structure. Hence, men with sufficiently high talents in the home sector will exit the labor force. The results indicate that such general equilibrium effects are offset by changes elsewhere.

# **6.3   Robustness checks**

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|---|---|---|---|---|---|---|---|---|
|parameterαt<br><br><br> <br><br>|at splits t<br><br><br>|he comp<br><br>|osite barri<br><br>|ersτi,19<br><br><br>|95<br>equally<br><br>|into its<br><br>|two co<br><br>|nstituents<br><br>|
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||on<br>|ly<br>|<br>on<br>|<br>ly<br>|on<br>|ly<br>|||
||1995|2005|1995|2005|1995|2005|1995|2005|
||(1)<br>|(2)<br>|(3)<br>|(4)|(5)|(6)|(7)|(8)|
|**Panel A: Market o**|**utput, relativ**|**e to 2015**(α|= 0. 0)||||||
|Costa Rica|1.399|<br>0.985|<br>0.663|0.850|1.013|1.081|0.772|0.914|
|El Salvador|1.018|<br>1.009|<br>0.993|1.038|1.046|1.012|1.058|1.080|
|Panama<br>|2.975<br>|1.644<br>|0.249<br>|0.391|0.651|0.774|0.249|0.491|
|**Panel B: Market o**|**utput, relativ**|**e to 2015**(α|= 0. 90)||||||
|Costa Rica|1.524|<br>1.041|<br>0.514|0.736|0.939|1.036|0.598|0.782|
|El Salvador|1.016|<br>0.971|<br>0.810|0.912|1.161|1.132|0.866|0.997|
|Panama|2.227|1.781|0.059|0.134|1.163|1.074|0.062|0.158|