Latin American women's earnings and participation in the labor force

Using historical census data and the latest household surveys, the authors investigate changes in female employment in Latin America, the factors that determine women's participation in the labor force, and the reasons for the gap between men's and women's earnings. The authors find, to their surprise, that despite worsened economic conditions since the 1970s, women's participation in the labor force has increased significantly since the 1950s. One explanation may be that women benefitted disproportionately from expansion of the public sector. The factors that have most affected women's decisions to join the work force have been education and family conditions. Creating opportunities for women's education and employment when such factors are absent will improve efficiency and reduce poverty. Other policy based factors that can affect women's participation in the work force include the availability of family planning services and child-care facilities. Women's participation in the labor force can also be affected by improving family law and tax regulations that create hardships for women, especially in the Caribbean. In all of the countries studied, women are rewarded less than men and gender differences in human capital endowments account for an average of about a third of the observed difference in earnings - prima facie evidence of discrimination. On the other hand, women appear to be rewarded more proportionate to their human capital endowments than men are.