Working parents and total factor productivity growth

Since 1963, changes in the family composition of the US labor force explain more than half of the variability in US total factor productivity growth. Using the Current Population Survey Annual Social and Economic Supplement, we document the rise of two (and single) working-parent families in the USA. We augment a standard growth-accounting equation to differentiate between parental and nonparental labor inputs and find that accounting for the parental composition of the labor force explains roughly 50 % of total factor productivity growth, the productivity slowdown of the 1970s, and the productivity rise of the 1990s. The parental composition of the workforce also helps to explain labor productivity differences across US states while controlling for differences in the age and gender profile of workers across states does not.