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Working Women are Key to Job Creation in US - 2002-05-18

What has enabled the United States to create more new jobs over the last decade than the European Union? The answer, according to a new study by two economists, one Dutch, the other American, is U.S. working women.

Only 64 percent of the working age population in Europe is employed, compared to 74 percent in the United States.

According to Harvard University economist Richard Freeman, that is because American women are much more likely to work in jobs outside the home than European women are. "What is doubly interesting is that the Americans have more children than Europeans," he said. "So our women are both working and having kids. So my thought in this project was: What are the European women doing, if they are not having kids, and they are not working?"

Mr. Freeman says his survey results reveal European women were working as many hours as American women. They were just working at home taking care of children, preparing meals.

The fact that American women work outside the home is, in itself, job generating says Ronald Schettkat of the Netherlands' Utrecht University, who co-authored the study. That is because working women are more likely to pay someone to take care of their children, he says, and more likely to buy food instead of preparing it themselves.

"If women start working, they reduce their household tasks, their household time and that is in a way one mechanism to create market work [for others]," says Mr. Schettkat.

Because so many U.S. women work, Mr. Schettkat says, far more people are employed in the restaurant industry in the United States than in Europe. Far more people are employed in day care, in retail sales.

Mr. Schettkat notes American women have a greater incentive to work because taxes are higher in Europe and women's earnings are lower. Less than one percent of European women have above-average incomes. "In this high income group in the United States, it is almost 20 percent," he said. "So there is an incentive for women in the United States to specialize in market work and then buy household help."

And it is easier for them to afford household help, Richard Freeman point out, because of the huge number of immigrants that have come to the United States to find jobs. "You come from Mexico, China, you are better off than you are in your home country, but you are paid very little on an American scale. Most of Europe does not have that," he said.

For all these reasons, Richard Freeman says, U.S. women spend 44 percent more time in the labor force than European women, and European women spend 33 percent more time on housework.