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Dynamic Female Labor Supply

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Author Info

  • Eckstein, Zvi

    ()
    (Interdisciplinary Center (IDC) Herzliya)

  • Lifshitz, Osnat

    ()
    (Academic College of Tel-Aviv Yaffo)

Abstract

The increase in female employment and participation rates is one of the most dramatic economic changes to have taken place during the last century. However, while the employment rate of married women more than doubled during the last fifty years, that of unmarried women remained almost constant. In order to empirically analyze these trends we divide the paper into two parts: In the first, we empirically estimate a traditional female dynamic labor supply model using an extended version of Eckstein and Wolpin (1989) in order to compare the various explanations in the literature for the observed trends. The main finding is that the rise in education levels accounts for about one-third of the increase in female employment while about 40 percent remains unexplained by observed household characteristics. We show that this unexplained portion can be empirically attributed to changes in preferences or the costs of childrearing and household maintenance. In the second part, we formulate and estimate a new framework for the couple intra-family game that is then used to analyze the household dynamic labor supply. We find that female labor supply may have increased significantly due to a change in the form of the household game.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4550.

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Length: 63 pages
Date of creation: Nov 2009
Date of revision:
Publication status: published in: Econometrica, 2011, 79 (6), 1675–1726
Handle: RePEc:iza:izadps:dp4550

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Keywords: accounting; female employment; dynamic discrete choice; household game;

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References

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Cited by:
  1. Noelia Bernal & Frederic Vermeulen, 2014. "The Impact of an Increase in the Legal Retirement Age on the Effective Retirement Age," De Economist, Springer, vol. 162(2), pages 115-145, June.
  2. Jeffrey B. Liebman & Erzo F.P. Luttmer, 2011. "Would People Behave Differently If They Better Understood Social Security? Evidence From a Field Experiment," NBER Working Papers 17287, National Bureau of Economic Research, Inc.
  3. Zvi Eckstein, 2012. "Household Interaction and the Labor Supply of Married Women," 2012 Meeting Papers 18, Society for Economic Dynamics.
  4. Raquel Fernández & Joyce C. Wong, 2014. "Divorce Risk, Wages, and Working Wives: A Quantitative Life-Cycle Analysis of Female Labor Force Participation," NBER Working Papers 19869, National Bureau of Economic Research, Inc.
  5. Bredemeier, Christian & Juessen, Falko, 2012. "Minimum Wages and Female Labor Supply in Germany," IZA Discussion Papers 6892, Institute for the Study of Labor (IZA).
  6. Raquel Fernández & Joyce Cheng Wong, 2014. "Free to Leave? A Welfare Analysis of Divorce Regimes," NBER Working Papers 20251, National Bureau of Economic Research, Inc.

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