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The Incredible Shrinking Elasticities: Married Female Labor Supply, 1978–2002

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  • Bradley T. Heim

Abstract

This paper demonstrates the extent to which married women’s labor supply elasticities have changed over the past quarter century. Estimates from March Current Population Survey data suggest that these elasticities have decreased substantially, by 60 percent for the hours wage elasticity (from 0.36 to 0.14), 70 percent for the hours income elasticity (from -0.053 to –0.015), 95 percent for the participation wage elasticity (from 0.66 to 0.03), and 60 percent for the participation income elasticity (from –0.13 to –0.05). Changing demographic characteristics explain little of the drop in these elasticities, suggesting that preferences toward work have changed across birth cohorts.

Suggested Citation

  • Bradley T. Heim, 2007. "The Incredible Shrinking Elasticities: Married Female Labor Supply, 1978–2002," Journal of Human Resources, University of Wisconsin Press, vol. 42(4).
    • Handle: RePEc:uwp:jhriss:v:42:y:2007:i4:p881-918
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    References listed on IDEAS

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    1. 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.
    2. Richard Blundell & Alan Duncan & Costas Meghir, 1998. "Estimating Labor Supply Responses Using Tax Reforms," Econometrica, Econometric Society, vol. 66(4), pages 827-862, July.
    3. Kelly Bishop & Bradley Heim & Kata Mihaly, 2009. "Single Women's Labor Supply Elasticities: Trends and Policy Implications," ILR Review, Cornell University, ILR School, vol. 63(1), pages 146-168, October.
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