The Deceleration of Female Labor Force Participation in Argentina

ANNA GIANNUZZI, Harvard College '20

THURJ Volume 12 | Issue 2

Abstract

Since the collapse of the Argentine economy in 2002 the country has experienced a severe deceleration in female labor
force participation. While the recent leveling of the female labor force participation rate may suggest a natural rate has
been reached, trends from the microdata suggest this is not the case. Since 2003, there has been an evident shift in the
compositional makeup of the female working age population. The number of low educated women in the female labor
force has fallen greatly as the number of middle and highly educated women continues to grow. Additionally, between
these three groups, labor force participation increases drastically with greater educational attainment. Therefore, as
women become more educated and transition to formal labor markets the labor force should approach the participation
rates of the middle and high educated population. In addition, cross-section analysis of the wage elasticity of the labor
supply of married women since 2003 reveals the growing dominance of the substitution effect over income effect for this
group. This attitudinal shift of the married female population could prove critical to the continued growth of a resilient
female labor force.