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Marriage market imbalances and labor force participation of Canadian women

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Abstract

Several studies find a negative correlation between the ratio of males to females and measures of female labor supply in the US. This negative correlation has been interpreted as empirical support for the hypothesis that marriage market conditions influence intra-household allocation decisions. Given the similarity of cultures and of labor supply behavior of women in Canada and the United States, and the fact that they both experienced baby-booms at roughly the same time, any explanation for changes in female labor supply would be expected to hold for both countries. We test the prediction that marriage market conditions have explanatory power for Canadian female labor force participation (LFP) rates over the period 1971–2001. We find smaller marriage market effects for Canada than those found for the US but similar in magnitude to those found for the US Midwest.

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Notes

  1. See Grossbard-Shechtman and Granger (1998), Angrist (2002), Chiappori, Fortin and Lacroix (2002), Fukuda (2006), Grossbard and Amuedo-Dorantes (2007) and Siow (2008).

  2. Ward and Pampel (1985a, b) find that the population sex ratio (female population to total population) is significant for explaining female LFP from 1955 to 1975 in 16 developed nations after controlling for a variety of factors. Pampel and Tanaka (1986) use pooled cross sectional data for 70 countries for the years 1965 and 1970 and find that for developed nations, more females in the population is correlated with higher female LFP. South and Trent (1988) find that the sex ratio was not correlated with female LFP in a cross-section of 58 developed nations.

  3. Ostry (1968) and Galarneau (1994) observe the dramatic rise in female labor force participation in Canada was general to all age groups and unrelated to year of birth. The absence of birth cohort effects suggests no correlation between labor supply and marriage market conditions.

  4. See Angrist (2002), Chiappori et al. (2002), Choo and Siow (2006) and Siow (2008).

  5. Grossbard-Shechtman (1984) develops a “demand and supply” model where the marriage equilibrium of a monogamous society is characterized by a quasi-wage received by the wife for spousal labor at which the amount of spousal labor a woman wants to supply equals the amount of spousal labor demanded by her mate.

  6. Angrist (2002: 998) also argues that “because sex ratios affect the likelihood of marriage, they may affect activities that complement or substitute for economic dependence on a spouse. For example, women who expect to marry need to worry less about developing an independent means of support.”

  7. Grossbard-Schechtman (1984) highlights that American women have typically married men who on average are two years older than themselves This age pattern for first marriages is also true for Canadian women (Statistics Canada 2007). Foot and Stoffman (1996) and Beaujot and McQuillan (1982) suggest that while marriage squeezes may explain changing marriage patterns, marriage patterns are not exogenous to marriage market conditions. Neither of these studies link marriage market conditions to labor force participation.

  8. This negative correlation has been documented for other periods in the US as well. See Angrist (2002).

  9. For some birth cohorts GAD calculate the sex ratio for ages 25–29 since only decennial census data is available. For example, the sex ratio for the 1946–50 birth cohort is calculated with the number of women aged 20–24 in the 1970 Census while for the 1941–45 birth cohort, GAD use the number of women aged 25–29 in the 1970 Census.

  10. The idea that sex ratios specific to birth cohorts are constant over time is open to criticism. For example, as individuals marry at higher ages, or perhaps for second marriages, differences in the ages of husbands and wives may be greater. This would suggest that how sex ratios are calculated should change over the life-cycle.

  11. Given our limited degrees of freedom for this study, we do not include lagged variables to correct for this problem, but we do estimate a variety of reduced form specifications to assess the sensitivity/robustness of our results.

  12. Prior to 1971, Canada had decennial Censuses. Where GAD chose to calculate sex ratios for 2–5 year birth cohorts per Census at ages 20–24 and 25–29, for Canadian women born before 1946 we calculate the sex ratio based on population counts at ages 20–24 in all cases. In Census years, we use the actual Census population counts by age and for years between Censuses, we use Statistics Canada’s estimates of population counts that are interpolations from actual Census counts.

  13. See Angrist (2002) and Siow (2008) for discussions of the problems with identifying marriage market influences on female labor supply using indirect measures of marriage market conditions like sex ratios or birth cohort dummy variables.

  14. See Beaudry et al. (2000). In addition, the stagnation of female LFP rates for recent cohorts of Canadian women has also been documented by Beaudry and Lemieux (1999).

  15. Alternatively, we have tried a specification closer to that in GAD (2007) that omits husband’s wages but includes husband educational levels. The results are similar to those shown in Table 3, with the sex ratio variable being small and positive but not significant. Having a husband with higher education reduces female LFP.

  16. The total effect for college educated women is −0.9 (0.023 − 0.111 = −0.088). For university educated it is −0.32 (0.023 − 0.338 = −0.315).

  17. This puzzling result suggests that there is a cohort effect negatively associated with the LFP of university educated females in Canada (and in these regions of the US). One plausible explanation is that education also enhances the productivity of household work. In areas where the difference between the value of market work and household work is small, an increase in the fraction of available men may reduce the LFP of (relatively scarce) educated females.

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  1. Department of Economics, University of Calgary, 2500 University Drive NW, Calgary, Alberta, Canada, T2N 1N4

    J. C. Herbert Emery & Ana Ferrer

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  1. J. C. Herbert Emery
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  2. Ana Ferrer
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Correspondence to Ana Ferrer.

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Emery, J.C.H., Ferrer, A. Marriage market imbalances and labor force participation of Canadian women. Rev Econ Household 7, 43–57 (2009). https://doi.org/10.1007/s11150-008-9040-7

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