Can Economic Pressure Overcome Social Norms? The Case of Female Labor Force Participation

Abstract:

We investigate the role of both supply and demand mechanisms driving the early female labor force participation, in the presence of unbalanced sex ratios and strong social norms against female employment. We exploit exogenous variation in sex ratios across cohorts and regions, using instruments based on casualties from the Portuguese Colonial War and massive emigration in the 1960s. As the sex ratio declined, female participation increased. Gender segregation across occupations and industries, and the gender pay gap declined. These findings are consistent with the predominance of a demand shock in favor of female labor, over a supply shock. Our findings help to explain an apparent puzzle, a decades-long high female participation in Portugal, as opposed to the other Southern European countries. We document a channel driving female participation that has received little attention.

Joint work with: Louis-Philippe Morin