48th CARF Seminar：Women, Wealth Effects, and Slow Recoveries (joint with Masao Fukui and Emi Nakamura)

February 20, 2020 （Thursday） 13:00-14:30

Seminar Room 1 on the 1st floor of the Economics Research Annex (Kojima Hall)

Jón Steinsson (University of California, Berkeley)

Macroeconomics Workshop 2019

Business cycle recoveries have slowed in recent decades. This slowdown comes entirelyfrom female employment: as women’s employment rates converged towards men’s over thepast half-century, the growth rate of female employment slowed. We ask whether this slow-down in female employment caused the slowdown in overall employment during recent busi-ness cycle recoveries. Standard macroeconomic models with “balanced growth preferences”imply that this cannot be the cause, since the entry of women “crowds out” men in the labormarket almost one-for-one. We estimate the extent of crowd out of men by women in the labormarket using state-level panel data and find that it is small, contradicting the standard model.We show that a model with home production by women can match our low estimates of crowdout. This model—calibrated to match our cross-sectional estimate of crowd out—implies that70% of the slowdown in recent business cycle recoveries can be explained by female conver-gence.