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Nature or Nurture? Learning and the Geography of Female Labor Force Participation
Author(s) -
Fogli Alessandra,
Veldkamp Laura
Publication year - 2011
Publication title -
econometrica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 16.7
H-Index - 199
eISSN - 1468-0262
pISSN - 0012-9682
DOI - 10.3982/ecta7767
Subject(s) - nature versus nurture , relevance (law) , economics , cultural transmission in animals , set (abstract data type) , demographic economics , aggregate (composite) , economic geography , labour economics , sociology , political science , computer science , materials science , biology , anthropology , law , composite material , genetics , programming language
One of the most dramatic economic transformations of the past century has been the entry of women into the labor force. While many theories explain why this change took place, we investigate the process of transition itself. We argue that local information transmission generates changes in participation that are geographically heterogeneous, locally correlated, and smooth in the aggregate, just like those observed in our data. In our model, women learn about the effects of maternal employment on children by observing nearby employed women. When few women participate in the labor force, data are scarce and participation rises slowly. As information accumulates in some regions, the effects of maternal employment become less uncertain and more women in that region participate. Learning accelerates, labor force participation rises faster, and regional participation rates diverge. Eventually, information diffuses throughout the economy, beliefs converge to the truth, participation flattens out, and regions become more similar again. To investigate the empirical relevance of our theory, we use a new county‐level data set to compare our calibrated model to the time series and geographic patterns of participation.