Women in the Workforce Aggregate

Women in the Workforce

Aggregate Supply and Demand Model

Women's participation in the labor force since the 1960s: Aggregate economic effects

Women's participation in the labor force since the 1960s: Aggregate economic effects

The influence of the women's movement is one of the primary reasons cited for the expansion of women's participation in the American workforce since 1960. "The percentage of adult American women who are employed climbed from about 37% in 1965 to about 55% in 2008, according to data from the Bureau of Labor Statistics and the National Bureau of Economic Research" (Eaves 2009). By lobbying for gender equality laws and making gender discrimination socially unacceptable, the women's movement increased the opportunities for women to gain inroads into the top universities of the nation. Jobs available for women became more lucrative, and thus more attractive. Women began having fewer children as a result of expanded vocational opportunities and the availability of safe and effective birth control.

The industry of childcare began to expand, and also grew more affordable. Labor-saving devices that made household chores easier were another factor in enabling more women to work comfortably outside the home. A number of industries are credited as arising largely because of the influx of women in the workforce, including the restaurant and convenience food industry (as women have less time to prepare home-cooked meals), the housecleaning industry, and the child care industry.

The Baby Boom era, when many women left the factories where they had worked during World War II and stayed home to raise their families, was an unprecedented era of American prosperity. As the American economy began to contract in the 1970s, and inflation began to rise, more women needed as well as desired to enter the workforce. Having two incomes was a powerful economic stimulus for the American economy. As many women did not return home even after the sluggish economic growth of the 1970s began to dissipate, dual-income families became the norm rather than the exception and elevated the expected standard of living for the American family across the nation.

Theoretically, by expanding the number of workers in every segment of the workforce, the supply of labor should go up, and thus wages should go down. However, because of the long-term sustained economic growth engendered by dual-income families, wages have increased. Women have also increasingly sought professional degrees to further their earning power, to the point where they outnumber men on many college campuses across the nation. As the average household income has increased, more goods and services are being purchased overall and prices have gone up -- although the prices of many 'necessary' goods such as food now occupies a smaller percentage of the income of the average middle-class family. Thus the primary result of the expansion of women in the workforce has been its role in "help[ing] fuel economic growth for decades" (Porter 2007).