Lucky women in unlucky cohorts: Gender differences in the effects of initial labor market conditions in Latin America

Abstract

This paper assesses gender differences in the effects of adverse conditions at labor-market entry in a developing region. Using harmonized microdata from national household surveys for 15 Latin American countries, we build a synthetic panel of cohorts that potentially transition from school to work and observe their labor market outcomes 10 years later. We find that men who faced higher unemployment rates at ages 18–20 suffer a negative effect on employment at ages 27–30. In contrast, women from those same unlucky cohorts have higher employment rates and earnings. Our results are consistent with women acting as secondary workers in downturns. We also find that initial labor market conditions correlate with the role played by women within the household and to perceptions about gender roles later in life. Such higher empowerment could be a result of increased female labor participation and at the same time might act as a mechanism underlying the persistence of the positive effects on female labor outcomes.