Changes in Relative Wages and Family Labor Supply
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.
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.:
- Richard Blundell & Alan Duncan & Costas Meghir, 1998.
"Estimating Labor Supply Responses Using Tax Reforms,"
Econometric Society, vol. 66(4), pages 827-862, July.
- Richard Blundell & Alan Duncan & Costas Meghir, 1995. "Estimating labour supply responses using tax reforms," IFS Working Papers W95/07, Institute for Fiscal Studies.
- 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.
- 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.
- Kooreman, P. & Kapteyn, A.J., 1984. "Estimation of rationed and unrationed household labor supply functions using flexible functional forms," Research Memorandum FEW 157, Tilburg University, School of Economics and Management.
- Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
- Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-161, January.
- Deaton, Angus, 1985. "Panel data from time series of cross-sections," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 109-126.
- 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.
- 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.
- 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.
- Joshua D. Angrist, 1988. "Grouped Data Estimation and Testing in Simple Labor Supply Models," Working Papers 614, Princeton University, Department of Economics, Industrial Relations Section..
- John Pencavel, 1997. "Changes in Male Work Behavior and Wages," Working Papers 97046, Stanford University, Department of Economics.
- 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.
- 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. Full references (including those not matched with items on IDEAS)
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: ()
If references are entirely missing, you can add them using this form.