Empirical Estimate of FLPR

Empirical Estimate of the Female Labor Force Participation Rate

[Name of the Author]

[Name of the Institute]Introduction

Even though the now general trend is that the women are increasingly participating in the labor market, there still exists a big gap in the female labor force participation when the US is compared with the other OECD countries. When close examination of single countries is done, significant variation in the participation rates is observed in the inner regional levels. This paper is an attempt to comprehend this variation in the female labor force participation rates between the US and the other OECD countries. This paper will also provide a model for empirical estimation.

Factors affecting the issue

The traditionally used method for the determination of the participation rates is by developing a formula that implies the aspects of labor-supplying decision. These decisions should be in the boundaries of the trade-off between the job and luxury. In the model that is under consideration the level of wage is of extreme importance or more authentically maybe labeled as the decisive variable. This wage variable helps to analyze and compare the market wage of an individual and the reservation wage of that particular individual. The attention has been increased on the aspect of the problems that obstruct the fusion of the work and the family life of the women. Specifically, if the family or household has young children then the children's presence is recorded as the one of the most important aspect of women taking up the decision of working and participating in the labor force (OECD, 2002). When the issue is taken in more expansive scope the influence of the institutional settings and the social policies is very large on the combining the work and the family life and having them socially stable.

Empirical Model

In the empirical model that is defined in this paper, all the above described determinants are used. This is because the determinants described above heavily influence the rate for the participation of the female labor force. The first variable of focused attention is the aggregate level of wage and this variable is extremely emphasized in the model. Next to that variable the premier focus is on the relative wages of the women when these relative wages are compared to the relative wages of the men. This comparison is more commonly described as the gender wage gap. The density of the population in the regions under consideration is used as a proxy for the pressure that the other economies and the socio-cultural patterns put on. There are also some control variables in the model that are used to manage and consider the implications of the regional difference that exist in terms of the availability of childcare facilities and the fertility.

The model is developed using the approach of the spatial econometric methods and this is done for the analyses of the determinants of the participation rate of female in the labor force. This method has so far allowed us to determine the degree of the participation ...