Labor supply of married women in Mexico: 1990-2000

In the last couple of decades, and in particular during the last couple of administrations, the Mexican government has implemented various social programs targeted specifically to women, such as PROGRESA/Oportunidades, a child care program, and a gender equality program (PROIGUALDAD). The impact that those programs may have on the work behavior of women largely depends on the form that the female labor supply takes, and in particular, on the labor supply elasticities with respect to own wages, and the husband’s wages. Despite this fact, the literature on female labor supply in Mexico is very scarce. To our knowledge, there is no estimate of the female labor supply elasticities at the national level. This paper fills in this gap in the literature. Using data from the 1990 and 2000 Mexican Census of Population, we estimate a structural model of labor supply through an application of Wooldridge’s (2002) threestep procedure. We …nd that the female labor supply elasticities had a rather sharp decrease between 1990 and 2000, which suggests that women are getting increasingly attached to the labor market. We also find evidence of heterogenous effects for women with young children and women of different cohorts. Even though female are now less responsive to changes in wages, the elasticities that we …nd are still large enough so that social programs aimed at modifying females´ work behavior through incentives might still be very successful.