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Family Structure and Female Labour Supply in Mexico City

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Author Info
Gong, Xiaodong () (IZA, Bonn)
van Soest, Arthur (Tilburg University)

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Abstract

This paper investigates labour supply of married women in Mexico City. A static neoclassical structural mode is used. We assume that each woman chooses her labour supply and corresponding income so that her utility is maximized, conditional upon her husband ’s labour supply and earnings. We use a direct translog specification, and include family composition variables as taste shifters. Also taken into account are fixed costs of working, random preferences, and correlation between error terms in wage equations and random preference terms. The wage equation and the labour supply model are estimated jointly by smooth simulated maximum likelihood. We find income elasticities of labour supply of about -0.17, and wage elasticities of about 0.87. The latter is substantially underestimated if the correlation between wage equation errors and random preference terms is not taken into account. We find evidence that the presence of other adult females reduces the negative impact of young children on the mothers’ labour supply.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 214.

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Length: 46 pages
Date of creation: Nov 2000
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Handle: RePEc:iza:izadps:dp214

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Related research
Keywords: Female labour supply family structure discrete regression

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Find related papers by JEL classification:
C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models
J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
O54 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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References listed on IDEAS
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  1. repec:cup:etheor:v:8:y:1992:i:4:p:518-52 is not listed on IDEAS
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  8. Euwals, Rob & van Soest, Arthur, 1999. "Desired and actual labour supply of unmarried men and women in the Netherlands," Labour Economics, Elsevier, vol. 6(1), pages 95-118, March. [Downloadable!] (restricted)
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  9. Menno Pradhan & Arthur Van Soest, 1997. "Household Labor Supply In Urban Areas Of Bolivia," The Review of Economics and Statistics, MIT Press, vol. 79(2), pages 300-310, May. [Downloadable!] (restricted)
  10. Richard Blundell, 1987. "Econometric approaches to the specification of life cycle labour supply and commodity demand behaviour," Econometric Reviews, Taylor and Francis Journals, vol. 6(1), pages 103-165. [Downloadable!] (restricted)
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  11. Brownstone, David & Train, Kenneth, 1998. "Forecasting new product penetration with flexible substitution patterns," Journal of Econometrics, Elsevier, vol. 89(1-2), pages 109-129, November. [Downloadable!] (restricted)
  12. Mroz, Thomas A, 1987. "The Sensitivity of an Empirical Model of Married Women's Hours of Work to Economic and Statistical Assumptions," Econometrica, Econometric Society, vol. 55(4), pages 765-99, July. [Downloadable!] (restricted)
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  13. Gourieroux, Christian & Monfort, Alain, 1993. "Simulation-based inference : A survey with special reference to panel data models," Journal of Econometrics, Elsevier, vol. 59(1-2), pages 5-33, September. [Downloadable!] (restricted)
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Cited by:
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  1. Ayal Kimhi, 2003. "Family Composition and Off-Farm Participation Decisions in Israeli Farm Households," Labor and Demography 0307001, EconWPA. [Downloadable!]
  2. Tim Callan & Arthur van Soest & John R. Walsh, 2007. "Tax Structure and Female Labour Market Participation: Evidence from Ireland," IZA Discussion Papers 3090, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. Frederic Vermeulen, 2002. "A collective model for female labour supply with nonparticipation and taxation," Public Economics Working Paper Series ces0214, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics. [Downloadable!]
    Other versions:
  4. M.Biggeri & L.Guarcello & S.Lyon & F.Rosati, 2003. "The Puzzle of 'Idle' Children: Neither in School nor performing Economic Activity: Evidence from six Countries," UCW Working Paper 5, Understanding Children's Work (UCW Project). [Downloadable!]
  5. Heather Antecol & Kelly Bedard, 2002. "The Decision to Work by Married Immigrant Women: The Role of Extended Family Households," Claremont Colleges Working Papers 2002-34, Claremont Colleges. [Downloadable!]
  6. Flood, Lennart & Hansen, Jörgen & Wahlberg, Roger, 2003. "Household Labor Supply and Welfare Participation in Sweden," IZA Discussion Papers 769, Institute for the Study of Labor (IZA). [Downloadable!]
  7. Beninger, Denis & Laisney, François, 2002. "Comparison between unitary and collective models of household labor supply with taxation," ZEW Discussion Papers 02-65, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  8. P. Deb & F. Rosati, 2004. "Estimating the effect of fertility decisions on child labour and schooling," UCW Working Paper 30, Understanding Children's Work (UCW Project). [Downloadable!]
    Other versions:
  9. Flood, Lennart & Hansen, Jörgen & Wahlberg, Roger, 2003. "Household Labour Supply and Welfare Participation in Sweden," CEPR Discussion Papers 3905, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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