Culture and Womens LFP

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Culture and Womens LFP

• Raquel Fernández
• NYU
• The World Bank, April 2008

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Female LFP 1950-2000
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Why has womans role changed?

• Technology
• Household appliances washing machine, vacuum
  cleaner, etc.
• Infant formula
• Decreased infant and maternal mortality
• Modern contraception
• Structural change the decreased importance of
  brawn and increased importance of brain (e.g. the
  rise of the clerical sector).
• What about changes in attitudes or culture?

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Fernández, Fogli, Olivetti (QJE,
2004) Controlling for a large variety of
socio-economic indicators, we show that (white)
men whose mothers worked while they were growing
up tend to be married to women who also
work. Large quantitative effect 32 percentage
points. A mother who works increases the
probability that mans wife works from 39 to
71. Preference transmission Men brought up by
working mother either prefer women who work or
are preferred by women who want to work.
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• WW II evidence In states with higher
  mobilization rates, more women with children
  worked
• more men brought up by working women
• more attractive for married women to work in
  these states.
• This effect is present for the right cohort of
  children (those born 1930-35) and not for earlier
  cohorts.

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The Epidemiological Approach(Fernández 2007)

• Are cross-country health differences driven by
  genetic or environmental (including cultural)
  factors?
• Compare a health outcome (e.g. heart disease) for
  immigrants with that for natives . Is there
  convergence in health outcomes?
• If convergence ? environment
• If convergence is not observed, one cannot
  automatically conclude genetics.

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The Epidemiological Approach in Economics

• Are cross-country differences in an economic
  outcome (e.g. saving rates) driven by
  economic/institutional factors or does culture
  play a quantitatively important role?
• A different set of problems
• The behavior of immigrants may be differentially
  affected by shocks (language, employment, etc.).
• Assimilation beliefs influenced by mainstream
  culture
• Selection immigrants are not the average
  individual
• First paper Carroll, Rhee, and Rhee
  (1994)--Studied savings behavior of immigrants to
  Canada. Found no significant effect of culture,
  e.g., Asian immigrants did not save at higher
  rate.

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Fernández and Fogli (JEEA 2006, 2007)Fernández
(JEEA 2007)

• Examine an arguably less problematic sample
  Second- generation Americans.
• Shocks and unobserved economic factors less
  important.
• Problem of cultural assimilation remains.
• Basic hypothesis Women born in US with
  foreign-born parents face same market prices and
  institutions but have different ancestries ?
  maybe different cultures (beliefs about women's
  role, ideal family size, etc.).
• Instead of black box of country dummy, use past
  level of female LFP in the country of ancestry as
  a proxy for culture.

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The Argument

• Cultural proxy Female LFP in country of
  ancestry. It is affected by
• Economic and Institutional Factors
• wages probability of finding a job location
  husband's income daycare cost and quality, etc.
• Cultural Factors
• one's own beliefs/preferences about working/not
  working
• treatment by family, friends, neighbors, if one
  works/does not work how working women are
  portrayed (media) etc.
• By having all women face a common econ./instit.
  environment, female LFP in country of ancestry
  should affect women only through the cultural
  component.

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• Many possible reasons why Female LFP in parents
  country-of-ancestry may not have explanatory
  value even if culture matters
• assimilation
• mismeasurement of female LFP
• selection
• Social incentives may be different
• Thus, had we found no explanatory value for
  female LFP, it would not imply that culture is
  irrelevant ? this is a very demanding test!

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Challenge

• There also exist economic channels of
  intergenerational transmission wealth,
  education, ability, etc.
• Have we adequately controlled for differences
  in economic variables?

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Sample selection

• The 1970 US census (last census to ask
  individuals where their parents were born).
• We use father's birthplace as ancestry.
• Married women 30-40 yrs old, born in US. Not
  living in institutions, not living on a farm,
  occupation not in agriculture.

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More sample selection

• From which decade should we take female LFP in
  country of ancestry? 1930-1970?
• Because of data limitations ? 1950.
• Robust to later decades. Very high correlation
  over the decades (1950-2000).
• Exclude USSR and 10 European countries which
  became centrally-planned economies around WWII.
• culture may have changed significantly and
  parents were living in the US then.

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Summary Statistics across Women and
CountriesFinal sample 6774 women from 25
countries
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Magnitudes

• Increase in LFP 1950 by 1 std dev. (11.4) is
  associated with an increase of .83 hours worked
  in 1970.
• This is 32 of std dev. in hours worked in US
  across countries of ancestry.
• TFR Increase in TFR 1950 by 1 std dev. (1.83) is
  associated with increase of 0.40 children in
  1970.
• This is around 95 of the std dev. in the US
  across countries of ancestry.

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Magnitudes

• Take a woman with average education, married
  to a man also with average education and with
  average income.
• For this average woman, having parents from
  Finland rather than from Lebanon, increases the
  amount she works (in the US in 1970) by 22.

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Potential Problem

• Can a "strictly economic" var. responsible for
  the positive correlation btwn cultural proxy and
  economic outcome?
• Include GDP pc in 1950 (also other years)
• Parental educationuse different (smaller) data
  set
• Ethnic human capital--1940 Census
• Cross-country measures of quality of education
  (Hanushek and Kimko)
• Wage regressions--if there is human capital, LFP
  should help explain wages.
• Female LFP does not help explain how much 2nd
  generation American men work (unlike TFR and
  fertility).

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Attitudes and WorkAn Epidemiological Approach
(Fernández JEEA 2007) I use two questions from
the World Value Survey 1990 (Europe) that
potentially reflect attitudes towards womens
work. 1. Being a housewife is just as fulfilling
as working for pay. 2. Having a job is the best
way for a woman to be an independent person.

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• Restrict sample to Europe (only 2-3 non-european
  cos. Approx. 1000 indivs./country.
• Run individual level Probit on whether
  individuals agreed (strongly or agree) with
  statement on country dummy.
• Control for age, age sq., sex, and marital status
  composition. Observations clustered at country
  level.
• Compare marginal effects associated with country
  dummies.

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Does the countrys marginal effect (1990) help
explain the work behavior in US 1970 of
second-generation American women of same
ancestry? Note that this is the same
epidemiological structure as before.

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Some big questions

• Why does culture differ across space or social
  groups?
• Why does culture change?
• The interplay between culture and institutions.

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