IDEAS home Printed from https://ideas.repec.org/a/uwp/jhriss/v39y2004i3p698-722.html
   My bibliography  Save this article

Changes in Relative Wages and Family Labor Supply

Author

Listed:
  • Paul J. Devereux

Abstract

The large changes in relative wages that occurred during the 1980s provide fertile ground for studying the behavioral responses of married couples to the wage changes of husbands and wives. I find estimates of own-wage and cross-wage elasticities for men that are very small. The own-wage elasticity for women is positive and the cross-wage elasticity for women suggests a strong negative response of female labor supply to changes in their husband’s wages. Family labor supply behavior determines how changes in individual wage rates translate into family earnings changes. The responses of women to changes in their husband’s wages attenuated somewhat the increases in individual wage inequality at the family level: The results suggest that the earnings of the wives of low-income men would actually have fallen over the decade if women’s labor supply did not respond to changes in their husbands’ wages. However, assortative mating implies that wage changes of husbands and wives are correlated and so family earnings inequality still grew during the decade of the 1980s.

Suggested Citation

  • Paul J. Devereux, 2004. "Changes in Relative Wages and Family Labor Supply," Journal of Human Resources, University of Wisconsin Press, vol. 39(3).
  • Handle: RePEc:uwp:jhriss:v:39:y:2004:i:3:p698-722
    as

    Download full text from publisher

    File URL: http://jhr.uwpress.org/cgi/reprint/XXXIX/3/698
    Download Restriction: A subscripton is required to access pdf files. Pay per article is available.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Richard Blundell & Alan Duncan & Costas Meghir, 1998. "Estimating Labor Supply Responses Using Tax Reforms," Econometrica, Econometric Society, vol. 66(4), pages 827-862, July.
    2. Montgomery, Edward, 1992. "Evidence on metropolitan wage differences across industries and over time," Journal of Urban Economics, Elsevier, vol. 31(1), pages 69-83, January.
    3. Kooreman, Peter & Kapteyn, Arie, 1986. "Estimation of Rationed and Unrationed Household Labour Supply Functions Using Flexible Functional Forms," Economic Journal, Royal Economic Society, vol. 96(382), pages 398-412, June.
    4. Deaton, Angus, 1985. "Panel data from time series of cross-sections," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 109-126.
    5. Ransom, Michael R, 1987. "An Empirical Model of Discrete and Continuous Choice in Family Labor Supply," The Review of Economics and Statistics, MIT Press, vol. 69(3), pages 465-472, August.
    6. Guido W. Imbens & Donald B. Rubin & Bruce I. Sacerdote, 2001. "Estimating the Effect of Unearned Income on Labor Earnings, Savings, and Consumption: Evidence from a Survey of Lottery Players," American Economic Review, American Economic Association, vol. 91(4), pages 778-794, September.
    7. Angrist, Joshua D., 1991. "Grouped-data estimation and testing in simple labor-supply models," Journal of Econometrics, Elsevier, vol. 47(2-3), pages 243-266, February.
    8. Chinhui Juhn, 1992. "Decline of Male Labor Market Participation: The Role of Declining Market Opportunities," The Quarterly Journal of Economics, Oxford University Press, vol. 107(1), pages 79-121.
    9. Lundberg, Shelly J, 1988. "Labor Supply of Husbands and Wives: A Simultaneous Equations Approach," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 224-235, May.
    10. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    11. John Pencavel, 1997. "Changes in Male Work Behavior and Wages," Working Papers 97046, Stanford University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Blundell, Richard & Macurdy, Thomas, 1999. "Labor supply: A review of alternative approaches," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695, Elsevier.
    2. Lusi Liao & Sasiwimon Warunsiri Paweenawat, 2021. "The inversion of married women's labour supply and wage: Evidence from Thailand," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 35(1), pages 82-98, May.
    3. Paul J. Devereux, 2007. "Small-sample bias in synthetic cohort models of labor supply," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(4), pages 839-848.
    4. Lusi Liao & Sasiwimon Warunsiri Paweenawat, 2018. "Labour Supply of Married Women in Thailand: 1985-2016," PIER Discussion Papers 88, Puey Ungphakorn Institute for Economic Research, revised Jun 2018.
    5. Francine D. Blau & Lawrence M. Kahn, 2005. "Changes in the Labor Supply Behavior of Married Women: 1980-2000," NBER Working Papers 11230, National Bureau of Economic Research, Inc.
    6. Paul J. Devereux, 2003. "Changes in Male Labor Supply and Wages," ILR Review, Cornell University, ILR School, vol. 56(3), pages 409-428, April.
    7. Anil Kumar, 2016. "Lifecycle-consistent female labor supply with nonlinear taxes: evidence from unobserved effects panel data models with censoring, selection and endogeneity," Review of Economics of the Household, Springer, vol. 14(1), pages 207-229, March.
    8. Francine D. Blau & Lawrence M. Kahn, 2007. "Changes in the Labor Supply Behavior of Married Women: 1980–2000," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 393-438.
    9. Eleftherios Giovanis & Oznur Ozdamar, 2019. "A Collective Household Labour Supply Model with Disability: Evidence from Iraq," Journal of Family and Economic Issues, Springer, vol. 40(2), pages 209-225, June.
    10. Abe, Yukiko & Tamada, Keiko, 2010. "Regional patterns of employment changes of less-educated men in Japan: 1990-2007," Japan and the World Economy, Elsevier, vol. 22(2), pages 69-79, March.
    11. Devereux, Paul J., 2007. "Improved Errors-in-Variables Estimators for Grouped Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 25, pages 278-287, July.
    12. Kaya, Ezgi, 2014. "Heterogeneous Couples, Household Interactions and Labor Supply Elasticities of Married Women," Cardiff Economics Working Papers E2014/18, Cardiff University, Cardiff Business School, Economics Section.
    13. Stevenson, Adam, 2012. "The Labor Supply and Tax Revenue Consequences of Federal Same-Sex Marriage Legalization," National Tax Journal, National Tax Association;National Tax Journal, vol. 65(4), pages 783-806, December.
    14. van Soest, A.H.O., 1990. "Essays on micro-econometric models of consumer demand and the labour market," Other publications TiSEM be045d62-a73d-4d7c-a591-f, Tilburg University, School of Economics and Management.
    15. Deborah A. Cobb‐Clark & Thomas Crossley, 2003. "Econometrics for Evaluations: An Introduction to Recent Developments," The Economic Record, The Economic Society of Australia, vol. 79(247), pages 491-511, December.
    16. Rumman Khan, 2018. "Assessing cohort aggregation to minimise bias in pseudo-panels," Discussion Papers 2018-01, University of Nottingham, CREDIT.
    17. Inmaculada Garcia & Carmen Marcuello, 2002. "Family model of contributions to non-profit organizations and labour supply," Applied Economics, Taylor & Francis Journals, vol. 34(2), pages 259-265.
    18. Kapteyn, Arie & Kooreman, Peter & van Soest, Arthur, 1990. "Quantity Rationing and Concavity in a Flexible Household Labor Supply Model," The Review of Economics and Statistics, MIT Press, vol. 72(1), pages 55-62, February.
    19. Maria Concetta Chiuri, 1999. "Intra-Household Allocation of Time and Resources: Empirical Evidence on a Sample of Italian Households with Young Children," CSEF Working Papers 15, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    20. Bartels, Charlotte & Shupe, Cortnie, 2018. "Drivers of participation elasticities across Europe: gender or earner role within the household?," EUROMOD Working Papers EM7/18, EUROMOD at the Institute for Social and Economic Research.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uwp:jhriss:v:39:y:2004:i:3:p698-722. 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: . General contact details of provider: http://jhr.uwpress.org/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: http://jhr.uwpress.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.