Male-biased Demand Shocks and Women's Labour Force Participation: Evidence from Large Oil Field Discoveries

Abstract

Do male-biased labour demand shocks affect women's labour market outcomes? To study this question, we examine large oil field discoveries in the southern USA from 1900 to 1940. We find that oil wealth has an overall positive effect on female labour force participation that is driven by single women. While oil discoveries increase demand for male labour and raise male wages, they do not drive women out of the tradable goods sector or the labour force. Our findings suggest that the absence of any crowding out effects of oil wealth can be explained by compensating forces such as demand effects within the tradable sector, or by income effects that lead to growth in the non-tradable sector.