Most strikingly we find that, over both decades, there was a steady and dramatic
reduction in women’s own wage labor supply elasticity, a significant new development. In
addition, continuing a long-term trend, married women’s labor supply also became substantially
less responsive to their husbands’ wages, particularly over the 1980s. Taking the 1980 to 2000
period as a whole, we estimate that married women’s own wage elasticity was reduced by 50 to
56 percent, while their cross wage elasticity fell by 38 to 47 percent in absolute value. These
reductions occurred at both the extensive and intensive margins; however, the decrease in own
wage elasticities for annual hours occurred mostly through a reduction of responsiveness at the
extensive margin. In contrast to the trends for wives, husbands’ own wage elasticities were very
3
small and did not show a strong pattern over time, and husbands showed little labor supply
responsiveness with respect to their spouses’ wages. Thus, married women’s own and cross
wage labor supply elasticities were becoming more like married men’s. Such a development is
likely to be due at least in part to the fact that, with rising participation rates, fewer and fewer
married women are on the margin between participating and not participating in the labor force.
Moreover, increasing divorce rates and increasing career orientation of married women are also
expected to make their labor supply less sensitive to their own wages and to their husbands’
wages (Goldin 1990).