The Great Depression and the Lasting Effects of Mortgage Debt on Women’s Work

Andriana Bellou, Emanuela Cardia
Université de Montréal (2015)

Women labor force participation increased dramatically between 1930 and 1960. Breaking with the past, a large share of women worked past their early 20s, and many kept working into their 50s. The cohort of women responsible for this new trend was born between the late 19th and the early 20th century and was of working age during the Great Depression. We show in this paper that their life-cycle labor pattern is linked to the Great Depression and to the large mortgage debt this cohort accumulated over the 1920s, during a period of rising housing prices. The sharp and prolonged decrease in employment and income together with a large price deflation, made the depression years particularly hard on debt and mortgage holders. These effects are strong and persistent and can explain their entry patterns into the 1950s.