Reallocation in Gender, Factors and Ideas and Economic Growth
Paper Session
Friday, Jan. 3, 2025 8:00 AM - 10:00 AM (PST)
- Chair: Russell Wong, Federal Reserve Bank of Richmond
Gendered Change: 150 Years of Transformation in US Hours
Abstract
Women's contribution to the economy has been markedly underestimated in predominantly agricultural societies, due to their widespread involvement in unpaid agricultural work. Combining data from the US Census and several early sources, we create a consistent measure of male and female employment and hours for the US for 1870-2019, including paid work and unpaid work in family farms and non-farm businesses. The resulting measure of hours traces a Ushape for women, with a modest decline up to mid-20th century followed by a sustained increase, and a monotonic decline for men. We propose a multisector economy with uneven productivity growth, income effects, and consumption complementarity across sectoral outputs. During early development stages, declining agriculture leads to rising services -- both in the market and the home -- and leisure, reducing market work for both genders. In later stages, structural transformation reallocates labor from manufacturing into services, while marketization reallocates labor from home to market services. Given gender comparative advantages, the first channel is more relevant for men, reducing male hours, while the second channel is more relevant for women, increasing female hours. Our quantitative illustration suggests that structural transformation and marketization can account for the overall decline in market hours from 1880-1950, and one quarter of the rise and decline, respectively, in female and male market hours from 1950-2019.Mismatch and Assimilation
Abstract
Income disparity across countries has been large and widening over time. We develop a tractable model where factor requirements in production technology do not necessarily match a country's factor input profile. Appropriate assimilation of frontier technologies balances such multidimensional factor input-technology mismatch, thus mitigating the efficiency loss. This yields a new measure for endogenous TFP, entailing a novel trade-off between a country's income level and income growth that depends critically on the assimilation ability and the factor input mismatch. Our baseline model accounts for 80%-92% of the global income variation over the past 50 years. The widening of mismatch and heterogeneity in the assimilation ability account for 41% and 20% of the global growth variation, whereas physical capital accounts for about one third with human capital largely inconsequential. In particular, about 30% of the output growth in miracle Asian economies comes from narrowing the gap arisen from mismatch, and 94% of the growth stagnation in trapped African economies due to the widening mismatch. A country may fall into a middle-income trap after a factor advantage reversal that changes the pattern of mismatch. These patterns (poverty trap, middle-income trap and growth miracle) arise naturally when the assimilation ability is low.Discussant(s)
Huiyu Li
,
Federal Reserve Bank of San Francisco
Terry Cheung
,
Academia Sinica
John Fernald
,
INSEAD and Federal Reserve Bank of San Francisco
JEL Classifications
- E0 - General
- O0 - General