Understanding the Evolution of Female Employment in Mexico

Elia De la Cruz Toledo, Columbia University

The observed labor force participation rate of Mexican women increased 26 percentage points in the last two decades (from 34% in 1989 to 60% in 2012). Education and fertility patterns have drastically changed over this period. Returns to higher levels of education and the ‘penalty’ for having children have also changed, improving a women's likelihood of employment. This study shows a decomposition of key variables that have impacted women's employment decisions since the nineties. Decomposition results show that, between 1996 and 2012, returns to women's characteristics had an increasing role in explaining changes in employment, compared to endowments. Particularly, changes in the returns to motherhood and education increased in this period, while returns to other characteristics decreased. In adjusted models it is observed that in this period women have become less sensitive to within-household workers income. This behavior is associated to working women in developed countries.