Explaining the Last ‘M-Shape'

Over the last decades most OECD countries have seen an increase of female labour market participation and in parallel the formation of a ‘reverse U shape’ when considering the relation between female employment rates and age. Basically today, female participation rates tend to consistently increase with age, until before retirement, the rate of participation progressively declines. The relation between female labour market participation and age is now more similar to that experienced by males. 

However, in a context of progressive harmonisation, South Korea continues to display a persistent M Shape in the relation between female participation rates and age. In the past other countries, characterised by different cultural values, welfare state regimes and labour market structures have experienced an M Shape, but they have seen progressively (or they are in the process of) a change, with a transition to reversed U Shape.

On this basis, we compare countries over time, and we distinguish three different groups (with Korea as an outlier): (1) nations that experienced at some point a M Shape but do not have it anymore, (2) nations that never had one, (3) nations with an M Shape that is progressively fading away. After carefully analysing the various explanations existent in the literature for the persistence of the M Shape and the transition from the M Shape to the Reverse U Shape, we use the crucial and unique case of Korea in order to illustrate how the combination of specific market structures (and regulation) together with a lack of implicit family policy, seem to be the main explanatory framework for the existence of an M Shape in the relation between female participation rates and age.