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Implications of Changes in Men's and Women's Labor Force Participation for Real Compensation Growth and Inflation

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  • Anderson Katharine

    (University of Michigan, andersok@umich.edu)

  • Barrow Lisa

    (Federal Reserve Bank of Chicago, lbarrow@frbchi.org)

  • Butcher Kristin F.

    (Federal Reserve Bank of Chicago, kbutcher@wellesley.edu)

Abstract

During the 1990s economic expansion, the United States enjoyed both low inflation and low unemployment. Juhn, Murphy, and Topel (2002) point out that low unemployment for men in the 1990s was accompanied by historically high non-employment suggesting that the 1990s economy was not as strong as unemployment might indicate. We include women in the analysis and examine whether Phillips curve relationships between real compensation growth, changes in inflation, and labor market slackness are the same for men and women and whether measures of “non-employment” better capture underlying labor resource utilization. From 1965 to 2002 the increase in women’s labor force participation more than offsets the decline for men, and low unemployment rates in the 1990s were accompanied by historically low overall non-employment rates. We find that women’s measures of labor market slackness do as well as men’s in explaining real compensation growth and changes in inflation after 1983.

Suggested Citation

  • Anderson Katharine & Barrow Lisa & Butcher Kristin F., 2005. "Implications of Changes in Men's and Women's Labor Force Participation for Real Compensation Growth and Inflation," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-27, March.
    • Handle: RePEc:bpj:bejeap:v:topics.5:y:2005:i:1:n:7
    DOI: 10.1515/1538-0653.1252
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    References listed on IDEAS

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    Cited by:

    1. Lisa Barrow & Kristin F. Butcher, 2004. "Not working: demographic changes, policy changes, and the distribution of weeks (not) worked," Working Paper Series WP-04-23, Federal Reserve Bank of Chicago.
    2. Kristin F. Butcher & Kyung-Hong Park, 2008. "Obesity, disability, and the labor force," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 32(Q I), pages 2-16.
    3. Katharine L. Bradbury, 2006. "Measurement of unemployment," Public Policy Brief, Federal Reserve Bank of Boston.
    4. Doyle, Matthew, 2006. "Empirical Phillips Curves in OECD Countries: Has There Been A Common Breakdown?," Staff General Research Papers Archive 12684, Iowa State University, Department of Economics.

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