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Female Labor Supply With A Discontinuous, Nonconvex Budget Constraint: Incorporation Of A Part-Time/Full-Time Wage Differential

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  • Susan L. Averett
  • Julie L. Hotchkiss

Abstract

This paper incorporates the well-documented part-time/fulltime wage differential into an empirical labor supply model with both a heterogeneity- and a random-error term and estimates that model for women in the United States. Incorporation of the part-time/full-time wage differential results in a unique discontinuous, nonconvex budget set, and the consideration of estimation procedures previously unconfronted in the nonlinear budget constraint literature. The full structural representation of the budget constraint is shown to "fit" better than the alternative models estimated, and to yield a predicted hours distribution representative of actual hours. © 1997 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

Suggested Citation

  • Susan L. Averett & Julie L. Hotchkiss, 2000. "Female Labor Supply With A Discontinuous, Nonconvex Budget Constraint: Incorporation Of A Part-Time/Full-Time Wage Differential," The Review of Economics and Statistics, MIT Press, vol. 79(3), pages 461-470, August.
    • Handle: RePEc:tpr:restat:v:79:y:2000:i:3:p:461-470
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    Cited by:

    1. John Baffoe-Bonnie, 2001. "The Impact of Income Taxation on the Labor Supply of Part-time and Full-time Workers," International Review of Applied Economics, Taylor & Francis Journals, vol. 15(1), pages 107-128.
    2. Dustmann, Christian & Schmidt, Christoph M., 2000. "The Wage Performance of Immigrant Women: Full-Time Jobs, Part-Time Jobs, and the Role of Selection," IZA Discussion Papers 233, Institute of Labor Economics (IZA).
    3. Wolf, Elke, 1998. "Do hours restrictions matter? A discrete family labor supply model with endogenous wages and hours restrictions," ZEW Discussion Papers 98-44, ZEW - Leibniz Centre for European Economic Research.
    4. Kai Liu, 2016. "Explaining the gender wage gap: Estimates from a dynamic model of job changes and hours changes," Quantitative Economics, Econometric Society, vol. 7(2), pages 411-447, July.
    5. Nollenberger, Natalia & Rodríguez-Planas, Núria, 2011. "Child Care, Maternal Employment and Persistence: A Natural Experiment from Spain," IZA Discussion Papers 5888, Institute of Labor Economics (IZA).
    6. John Baffoe-Bonnie, 2004. "Interindustry part-time and full-time wage differentials: regional and national analysis," Applied Economics, Taylor & Francis Journals, vol. 36(2), pages 107-118.

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