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Intertemporal Labor Force Participation of Married Women in Germany: A Panel Data Analysis

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Author Info

  • Enrica Croda

    ()
    (Department of Economics, University Of Venice Cà Foscari)

  • Ekaterini Kyriazidou

    (Athens University of Economics and Business)

  • Iannis Polycarpou

    (Athens University of Economics and Business)

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    Abstract

    This paper analyzes the intertemporal labor force participation behavior of married women using an annual longitudinal sample from the German Socio-Economic Panel. A predominant characteristic of annual participation behavior is the high degree of persistence in individual participation decisions. We use several model specifications to distinguish among the alternative explanations of this serial persistence: state dependence, individual unobserved heterogeneity, and serial correlation in the transitory error component. Similar to Hyslop (1999), we employ both dynamic “fixed effects” linear probability models as well as several static and dynamic probit models with “random effects” and serially correlated errors. In addition, we apply the estimators proposed by Honoré and Kyriazidou (2000) for dynamic “fixed effects” discrete choice models. We find strong state dependence, and substantial effects for fertility variables. Transitory and permanent non-labor income have in general small effects.

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    File URL: http://www.unive.it/media/allegato/DIP/Economia/Working_papers/Working_papers_2011/WP_DSE_croda_kyriazidou_polycarpou_17_2011.pdf
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    Bibliographic Info

    Paper provided by Department of Economics, University of Venice "Ca' Foscari" in its series Working Papers with number 2011_17.

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    Length: 24
    Date of creation: Oct 2011
    Date of revision:
    Handle: RePEc:ven:wpaper:2011_17

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    Related research

    Keywords: State dependence; serial correlation; heterogeneity; panel data; intertemporal labor force participation; GSOEP.;

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    References

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    1. Holger Bonin & Rob Euwals, 2002. "Participation Behavior of East German Women after German Unification," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 D1-1, International Conferences on Panel Data.
    2. Carrasco, Raquel, 2001. "Binary Choice with Binary Endogenous Regressors in Panel Data: Estimating the Effect of Fertility on Female Labor Participation," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(4), pages 385-94, October.
    3. Bo E. Honoré & Ekaterini Kyriazidou, 2000. "Panel Data Discrete Choice Models with Lagged Dependent Variables," Econometrica, Econometric Society, vol. 68(4), pages 839-874, July.
    4. Keane, Michael P. & Sauer, Robert M., 2006. "Classification Error in Dynamic Discrete Choice Models: Implications for Female Labor Supply Behavior," IZA Discussion Papers 2332, Institute for the Study of Labor (IZA).
    5. Hotz, V Joseph & Kydland, Finn E & Sedlacek, Guilherme L, 1988. "Intertemporal Preferences and Labor Supply," Econometrica, Econometric Society, vol. 56(2), pages 335-60, March.
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