Intergenerational links in female labor force participation

Fernandez, Fogli, and Olivetti (2004) introduce an innovative model of how the experiences of one generation of women affect the behavior of the next generation of women via their sons/husbands. Empirically they find that a woman is more likely to work if her mother-in-law worked than if her own mother worked. We confirm this intriguing result but demonstrate that there is also a link between the labor force participation choices of mothers and daughters. Further, in an alternative theoretical model we show that the relationship between the labor force participation of mothers-in-law and daughters-in-law may be due instead to a woman's own preferences formed before selecting a spouse. Interestingly, the model demonstrates that the correlation in labor force status may be stronger for a mother-in-law/daughter-in-law pair than a mother/daughter pair, even if the preference formation channel is solely from mothers to daughters.

► Women are more likely to participate in the labor force if their mother worked. ► Correlation between mother-in-law/daughter-in-law pairs is also strong. ► We present a model of the preference formation channels and assortative mating. ► Assortative mating and mother/daughter channel could induce mother-in-law result.