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Joint Estimation of Sequential Labor Force Participation and Fertility Decisions Using Markov Chain Monte Carlo Techniques

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  • Troske, Kenneth

    ()
    (University of Kentucky)

  • Voicu, Alexandru

    ()
    (CUNY - College of Staten Island)

Abstract

In this paper we estimate the causal effect of children on the labor supply of women using panel data on women from the 1979 National Longitudinal Survey of Youth (NLSY79). We examine the effect of children both prior to and after birth as well as how the effect of children varies with the number of children. We also decompose the total effect of children into the direct and indirect components and separately examine the dynamics of these components. Sequential participation decisions for four levels of labor market involvement and fertility decisions are jointly modeled. We allow decisions to be correlated in a general fashion both across time and across choices. The estimation is performed using Markov chain Monte Carlo methods. We find that children have a strong effect on a women's labor market behavior in both the pre- and post-birth period. We also find that both the direct and indirect effects are large immediately after the birth of a child but that the indirect effect declines quickly over time. The effects of children vary by education and race.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1251.

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Length: 59 pages
Date of creation: Aug 2004
Date of revision:
Handle: RePEc:iza:izadps:dp1251

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Keywords: female labor supply; Gibbs sampler; multivariate probit model;

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Cited by:
  1. Xiaoyan Chen Youderian, 2014. "The motherhood wage penalty and non-working women," Economics Bulletin, AccessEcon, vol. 34(2), pages 757-765.
  2. Elena Bardasi & Chiara Monfardini, 2004. "Women's Employment, Children and Transition: An Empirical Analysis on Poland," Eastward Enlargement of the Euro-zone Working Papers wp25, Free University Berlin, Jean Monnet Centre of Excellence, revised 15 Oct 2004.
  3. Bernd Fitzenberger & Katrin Sommerfeld & Susanne Steffes, 2013. "Causal Effects on Employment after First Birth: A Dynamic Treatment Approach," SOEPpapers on Multidisciplinary Panel Data Research 576, DIW Berlin, The German Socio-Economic Panel (SOEP).
  4. Troske, Kenneth & Voicu, Alexandru, 2009. "The Effect of the Timing and Spacing of Births on the Level of Labor Market Involvement of Married Women," IZA Discussion Papers 4417, Institute for the Study of Labor (IZA).

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