Abstract
It is often argued that during recession women and children are put into the labour market in order to maintain household incomes. They are forced into low‐paid jobs in the informal sector. Evidence from Sao Paulo suggests a different picture. During recession young people withdrew from the labour market. Adult female participation rates did increase, but more slowly than the long‐term trend. Women's entry into the labour market during recession was not accompanied by a deterioration in employment conditions or a widening of male and female wage differentials. When the economy recovered, it was adult males who did not regain the losses in formal sector employment sustained in the recession.

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