1. (25%)
Below are census data showing labor force participation of women in the U.S., overall and by age group, from the Censuses of 1950 to 2010.

Participation Rate (percent)

1950
1960
1970
1980
1990
2000
2010
Female Total (16+)
33.9
37.7
43.3
51.5
57.5
59.9
58.6
20 to 24 years
46.0
46.1
75.5
68.9
71.3
73.1
68.3
25 to 34 years
34.0
36.0
45.0
65.5
73.5
76.1
74.7
35 to 44 years
39.1
43.4
51.1
65.5
76.4
77.2
75.2
45 to 54 years
37.9
49.8
54.4
59.9
71.2
76.8
75.7
55 to 64 years
27.0
37.2
43.0
41.3
45.2
51.9
60.2
65 years and over
40.8
27.1
19.8
8.1
8.6
9.4
13.8

Graph two sets of labor force participation profiles for women aged 20-64, where age group is on the
However, if the women are expected to extend their working period in labor force, they will have an increase incentive to invest in education and job training, which would lead to increase in wage rate. These are supported by the data, for young women surveyed in the 1960s, it was found that after 5 years, women with strong expectation of market work has a more rapidly rose earning profile compare to women who were weakly attached to the labor market. This difference in earning profile is caused by more investment in education and job-training since they had a better expectation of working period.

3. (20%)
Write an essay in which you discuss the key issues that we covered when looking at resource allocation within the household. In particular, you should note how utility functions in models that are used to study intrahousehold resource allocation differ from utility functions in most models that you’ve seen in economics (such as the model we use to consider the individual’s decision whether to participate in the labor force); you should address the relevance of equity/equality versus efficiency as a focal point for household decision makers, and you should briefly summarize the major findings of the three studies of intrahousehold resource allocation that were discussed in class (not the Kinshasa material).

In interdependent utility function, children are viewed