All In The Family: Family, Income, And Labor Force Attachment
Empirical labor market studies often do not include controls for family and income structure. Because these variables are significantly correlated with many of the variables commonly included, such as education, estimated coefficients are subject to omitted variable bias. We demonstrate how omission of family and income variables can lead to statistically biased coefficient estimates on nonfamily variables and can lead to false inferences by examining labor force attachment of workers who have lost their previous job. The traditional variables most biased by the omission of family and income characteristics are education, displacement age, and predicted pre-displacement wages. As an indication of the extent of the bias, we calculate expected labor force participation rates for single women, married women, and married men using the average characteristics for each group using both the biased and unbiased coefficients. We find a 50 percent reduction in the extent to which market-oriented opportunities explain the differences in observed labor force attachment between married women and men when family characteristics are included relative to when they are not.
Volume (Year): 5 (1999)
Issue (Month): 3 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RFEC20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RFEC20|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Addison, John T & Portugal, Pedro, 1989. "Job Displacement, Relative Wage Changes, and Duration of Unemployment," Journal of Labor Economics, University of Chicago Press, vol. 7(3), pages 281-302, July.
- Mroz, Thomas A, 1987.
"The Sensitivity of an Empirical Model of Married Women's Hours of Work to Economic and Statistical Assumptions,"
Econometric Society, vol. 55(4), pages 765-99, July.
- Thomas Mroz, . "The Sensitivity of an Empirical Model of Married Women's Hours of Work to Economic and Statistical Assumptions," University of Chicago - Population Research Center 84-8, Chicago - Population Research Center.
- Ashenfelter, Orley & Heckman, James J, 1974.
"The Estimation of Income and Substitution Effects in a Model of Family Labor Supply,"
Econometric Society, vol. 42(1), pages 73-85, January.
- Orley Ashenfelter & James Heckman, 1971. "The Estimation of Income and Substitution Effects in a Model of Family Labor Supply," Working Papers 402, Princeton University, Department of Economics, Industrial Relations Section..
- Maloney, Tim, 1991. "Unobserved Variables and the Elusive Added Worker Effect," Economica, London School of Economics and Political Science, vol. 58(230), pages 173-87, May.
- Romme, A. Georges L., 1990. "Projecting female labor supply: The relevance of social norm change," Journal of Economic Psychology, Elsevier, vol. 11(1), pages 85-99, March.
- John T. Addison & Pedro Portugal, 1987. "The effect of advance notification of plant closings on unemployment," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 41(1), pages 3-16, October.
- Robert G. Valletta, 1991.
"Job Tenure and Joblessness of Displaced Workers,"
Journal of Human Resources,
University of Wisconsin Press, vol. 26(4), pages 726-741.
- Jacob Mincer, 1962. "Labor Force Participation of Married Women: A Study of Labor Supply," NBER Chapters, in: Aspects of Labor Economics, pages 63-105 National Bureau of Economic Research, Inc.
- David Neumark, 1993. "Sex Discrimination and Women's Labor Market Interruptions," NBER Working Papers 4260, National Bureau of Economic Research, Inc.
- Carling, Kenneth & Edin, Per-Anders & Harkman, Anders & Holmlund, Bertil, 1996. "Unemployment duration, unemployment benefits, and labor market programs in Sweden," Journal of Public Economics, Elsevier, vol. 59(3), pages 313-334, March.
- Haurin, Donald R, 1989. "Women's Labor Market Reactions to Family Disruptions," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 54-61, February.
- Steven Stern, 1989. "Measuring the Effect of Disability on Labor Force Participation," Journal of Human Resources, University of Wisconsin Press, vol. 24(3), pages 361-395.
- Kell, Michael & Wright, Jane, 1990. "Benefits and the Labour Supply of Women Married to Unemployed Men," Economic Journal, Royal Economic Society, vol. 100(400), pages 119-26, Supplemen.
When requesting a correction, please mention this item's handle: RePEc:taf:femeco:v:5:y:1999:i:3:p:85-106. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.