Relative Cohort Size, Relative Income, and Married Women's Labor Force Participation: United States, 1968–2010



Relative cohort size—the ratio of young adults to prime-age adults—and relative income—the income of young adults relative to their material aspirations—have experienced substantial changes over the past 40 years. Results here show that changes in relative cohort size explain about 60 percent of the declines in women's starting wage—both relative and absolute—in 1968–82, and 97 percent of its increase in 1982–2001. Relative income is hypothesized to affect a number of behavioral choices by young adults, including marriage, childbearing, and female labor force participation, as young people strive to achieve their desired standard of living. Older family income—the denominator in a relative income variable—increased by 59 percent between 1968 and 2000, and then declined by 9 percent. Its changes explain 47 percent of the increase in the labor force participation of white married women in their first 15 years out of school between 1970 and 1990, and 38 percent of the increase in hours worked in the same period. The study makes use of individual-level measures of labor force participation and employs the lagged income of older families in a woman's year-state-race-education group to instrument parental income and hence material aspirations.