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Does It Pay for Women to Volunteer?

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Author Info

  • Sauer, Robert M.

    ()
    (Royal Holloway, University of London)

Abstract

This paper estimates the economic and non-economic returns to volunteering for prime-aged women. A woman's decision to engage in unpaid work, and to marry and have children, is formulated as a forward-looking discrete choice dynamic programming problem. Simulated maximum likelihood estimates of the model indicate that an extra year of volunteer experience increases wage offers in part-time work by 8.3% and wage offers in full-time work by 2.4%. The behavioral model also reveals an adverse selection mechanism which is consistent with the negative returns to volunteering found in reduced-form wage regressions. The negative selection is driven by differential unobserved market-productivity and heterogeneous marginal utilities of future consumption. The structural estimates also imply that the economic returns to volunteering are relatively more important than non-economic returns, and introduction of a tax-credit for volunteering-related childcare expenses would substantially increase volunteer labor supply and female lifetime earnings.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6784.

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Length: 48 pages
Date of creation: Aug 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6784

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Related research

Keywords: female labor supply; marriage; fertility; negative selection; attrition; dynamic programming; structural estimation; simulated maximum likelihood; volunteering;

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References

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  1. Daniel Diermeier & Michael Keane & Antonio Merlo, 2005. "A Political Economy Model of Congressional Careers," American Economic Review, American Economic Association, American Economic Association, vol. 95(1), pages 347-373, March.
  2. Flinn, C. & Heckman, J., 1982. "New methods for analyzing structural models of labor force dynamics," Journal of Econometrics, Elsevier, Elsevier, vol. 18(1), pages 115-168, January.
  3. Susumu Imai & Michael P. Keane, 2004. "Intertemporal Labor Supply and Human Capital Accumulation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(2), pages 601-641, 05.
  4. Michael P. Keane & Robert M. Sauer, 2009. "Classification Error in Dynamic Discrete Choice Models: Implications for Female Labor Supply Behavior," Econometrica, Econometric Society, Econometric Society, vol. 77(3), pages 975-991, 05.
  5. Michael P. Keane & Robert M. Sauer, 2010. "A Computationally Practical Simulation Estimation Algorithm For Dynamic Panel Data Models With Unobserved Endogenous State Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(4), pages 925-958, November.
  6. Magnac & Thesmar, 2002. "Identifying dynamic discrete decision processes," Working Papers 155888, Institut National de la Recherche Agronomique, France.
  7. Naomi E. Feldman, 2010. "Time Is Money: Choosing between Charitable Activities," American Economic Journal: Economic Policy, American Economic Association, American Economic Association, vol. 2(1), pages 103-30, February.
  8. Hanming Fang & Dan Silverman, 2004. "Time-inconsistency and Welfare Program Participation: Evidence from the NLSY," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 1465, Cowles Foundation for Research in Economics, Yale University.
  9. Houser, Daniel, 2003. "Bayesian analysis of a dynamic stochastic model of labor supply and saving," Journal of Econometrics, Elsevier, Elsevier, vol. 113(2), pages 289-335, April.
  10. Charles T. Clotfelter, 1985. "Federal Tax Policy and Charitable Giving," NBER Books, National Bureau of Economic Research, Inc, number clot85-1, October.
  11. van der Klaauw, Wilbert & Wolpin, Kenneth I., 2008. "Social security and the retirement and savings behavior of low-income households," Journal of Econometrics, Elsevier, Elsevier, vol. 145(1-2), pages 21-42, July.
  12. Clotfelter, Charles T., 1985. "Federal Tax Policy and Charitable Giving," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226110486, March.
  13. Menchik, Paul L. & Weisbrod, Burton A., 1987. "Volunteer labor supply," Journal of Public Economics, Elsevier, Elsevier, vol. 32(2), pages 159-183, March.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Why women should volunteer
    by Economic Logician in Economic Logic on 2012-10-16 14:30:00
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Cited by:
  1. Cozzi, Guido & Mantovan, Noemi & Sauer, Robert M., 2013. "Does it Pay to Work for Free? Wage Returns and Gender Differences in the Market for Volunteers," Economics Working Paper Series 1330, University of St. Gallen, School of Economics and Political Science.
  2. Helene Jorgensen, 2013. "Does It Pay to Volunteer? The Relationship Between Volunteer Work and Paid Work," CEPR Reports and Issue Briefs, Center for Economic and Policy Research (CEPR) 2013-10, Center for Economic and Policy Research (CEPR).

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