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Changes in the Labor Supply Behavior of Married Women: 1980–2000

Cornell University, National Bureau of Economic Research, IZA, and CESifoCornell University, IZA, and CESifo

Using March Current Population Survey data, we investigate married women’s labor supply from 1980 to 2000. We find a large rightward shift in their labor supply function for annual hours in the 1980s, with little shift in the 1990s. These shifts account for most of the slowdown in the growth of labor supply during this period. A major development was the dramatic decrease in the responsiveness of married women’s labor supply to their own and husbands’ wages: their own wage elasticity fell by 50%–56%, while their cross wage elasticity fell by 38%–47% in absolute value.