The increase in income per capita is accompanied, in virtually all countries, by two changes in economic structure: the increase in the share of government spending in gross domestic product (GDP), and the increase in female labor force participation. We argue that these two changes are causally related. We develop a growth model based on Galor and Weil (1996) where female participation in market activities, fertility, and government size, in addition to consumption and saving, is endogenously determined. Rising incomes lead to a rise in female labor force participation as the opportunity cost of staying at home and caring for the children increases. In our model, higher government spending decreases the cost of performing household chores, including, but not limited to, child rearing and child care, as in Rosen (1996). We also use a wide cross-section of data for developed and developing countries and show that higher market participation by women is positively and robustly associated with government size. We then investigate the causal link between participation and government size using a novel unique data set that allows the use of the relative price of productive home appliances as an instrumental variable. We find strong evidence of a causal link between female market participation and government size. This effect is robust to the country sample, time period, and a set of controls in the spirit of Rodrik (1998). (JEL O4, E62, H11)
Source: “WOMEN PREFER LARGER GOVERNMENTS: GROWTH, STRUCTURAL TRANSFORMATION, AND GOVERNMENT SIZE” from Economic Inquiry
The most entertaining political book I’ve ever read is this one. If you want to learn more about the state of politics today, I recommend checking out this book. For a humorous look at countries around the world I recommend this book. A great satire about politics in the modern age is here.
Can you tell if someone is a Republican or Democrat just by looking at their face?
Is corruption widespread in Congress?