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Say at home, or stay at home? Policy implications on female labor supply and empowerment

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  • Vidya Atal

    (Montclair State University)

Abstract

This paper develops a theory of female labor supply in a general equilibrium framework in the context of a developing economy. In stage 1, men and women decide whether to get married foreseeing the power and market dynamics in stage 2. Single people make their own decisions whereas married couples make decisions together, the power distribution among partners is determined endogenously. It is shown that female labor supply can take different shapes due to structural differences between economies and multiple equilibria might occur, causing low female labor force participation trap. As for policy implications, we find that tax-break to the employers can give a huge boost to female employment and may reduce the wage-gap. However, tax-benefit to women may widen the wage-gap although both these policies empower women. We also conclude that true empowerment should come with the freedom of choice (to work); increasing female labor force participation does not necessarily empower women. Results found here resonate well with previous empirical findings and suggest additional testable implications.

Suggested Citation

  • Vidya Atal, 2017. "Say at home, or stay at home? Policy implications on female labor supply and empowerment," Review of Economics of the Household, Springer, vol. 15(4), pages 1081-1103, December.
    • Handle: RePEc:kap:reveho:v:15:y:2017:i:4:d:10.1007_s11150-015-9281-1
    DOI: 10.1007/s11150-015-9281-1
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    Cited by:

    1. San Vicente Portes, Luis & Atal, Vidya & Juárez Torres, Miriam, 2019. "From households to national statistics: Macroeconomic effects of Women's empowerment," Economic Modelling, Elsevier, vol. 79(C), pages 286-294.
    2. Vidya Atal & Ram Sewak Dubey, 2014. "Affirmative action and empowerment: friends or foes?," Economics Bulletin, AccessEcon, vol. 34(2), pages 1012-1018.
    3. San Vicente Portes Luis & Atal Vidya & Juárez-Torres Miriam, 2019. "Women's Empowerment: Aggregate Effects on Savings and Wealth," Working Papers 2019-21, Banco de México.

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    More about this item

    Keywords

    Female labor supply; Collective utility model; Household equilibrium; Power; Women’s empowerment;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

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