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Family Structure and Female Labor Supply in Mexico City

Author

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  • Xiaodong Gong
  • Arthur van Soest

Abstract

We investigate labor supply of married women in Mexico City, using a static neoclassical structural model. By choosing her labor supply and corresponding income, each woman is assumed to maximize a direct translog utility function with family composition variables as taste shifters. We account for random preferences, their correlation with wage equation errors, and fixed costs of working. The wage equation and the labor supply model are estimated jointly by smooth simulated maximum likelihood. We find income elasticities of labor supply of about -0.17, and wage elasticities of about 0.87. The latter are underestimated if we ignore the correlation between wage equation errors and random preferences.

Suggested Citation

  • Xiaodong Gong & Arthur van Soest, 2002. "Family Structure and Female Labor Supply in Mexico City," Journal of Human Resources, University of Wisconsin Press, vol. 37(1), pages 163-191.
    • Handle: RePEc:uwp:jhriss:v:37:y:2002:i:1:p:163-191
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    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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