A New Look at Gender Effects in Participation and Occupation Choice

The growth in female labour particpation and occupational attainment represents the most dramatic feature of labour markets in the second half of the twentieth century. This has been due in part to developments in social attitudes and the consequent changes in the prices attached to womens’ characteristics, and in part to changes in those characteristics themselves. This paper analyses these issues by constructing models of participation and occupational choice for the years 1970 and 1990, and then by evaluating which participation and occupation regimes would have been selected by respondents with the characteristics of women observed in 1970 had they faced the coefficients which obtained in 1990. It is established that changing prices accounts for a substantial part of the improvement in womens’ fortunes in the labour market. To provide a basis of comparison, the model is also estimated for men. Choices concerning occupational and labour market participation are modelled using both the standard multinomial logit and the nested logit techniques. The latter, which has not previously been employed in the present context, alleviates problems due to the strong assumption in simpler models of the independence of irrelevant alternatives, and provides much additional useful information. JEL Classification: J16, J62, J7