Real wage rates for women have been generally rising over the years. This is attributed to the fact that women have been getting more educated over time. For example, the average woman in the 1950s was less educated than the average woman of today. They did not have the formal education that some jobs require such as college degrees. According to the Becker Model, higher wage rates will generate both income and substitution effects. The income effect will reduce the hours of work desired, and the substitution effect, related to both production-related and consumption-related activities within the home will tend to increase the hours of work. Goods will be substituted for time in the production of commodities and goods-intensive commodities will be substituted for time intensive goods in the household’s mix of consumer commodities. Both adjustments will free the wife’s time from household activities so that she may spend more time in the labor market. Simply put, the substitution effect has dominated the income effect for women, causing their participation rates to rise. However for married women, the income effect may be small because its size will vary directly with the amount of time they are already devoting to labor market work. In an extreme case, the income effect will be a non-factor for a married woman who is currently participating in labor market work. A wage rate increase will only affect a person’s income if they the individual is currently providing the same amount of hours in the labor market.

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