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Explaining Changes in Female Labour Supply in a Life-cycle Model

  • Attanasio, O.
  • Low, H.
  • Sanchez-Marcos, V.

We study the life cycle labour force participation of three cohorts of American women: those born in the 1930s, 1940s and 1950s. We document the large shifts in labour supply behaviour among these three cohorts, then use a life cycle model with endogenous female labour force participation, consumption and saving choices to search for an explanation. The dynamics of labour supply depends on child costs (relative to earnings), returns to experience and the rate of depreciation of human capital when out of the labour market. We calibrate the model to match the behaviour of the middle cohorts and investigate which changes in the main determinants of labour supply could have accounted for the substantial increase in labour supply in the early part of the life cycle observed for the youngest cohort. We conclude that shifts in the cost of children relative to life-time earnings are the most likely explanation.

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File URL: http://www.econ.cam.ac.uk/research/repec/cam/pdf/cwpe0451.pdf
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Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0451.

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Length: 69
Date of creation: Jul 2004
Date of revision:
Handle: RePEc:cam:camdae:0451
Note: L
Contact details of provider: Web page: http://www.econ.cam.ac.uk/index.htm

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  14. Ahn, N. & Mira, P., 1999. "A Note on the Changing Relationship Between Fertility and Female Employment Rates in Developed Countries," Papers 9903, Centro de Estudios Monetarios Y Financieros-.
  15. Claudia Goldin & Lawrence F. Katz, 2002. "The Power of the Pill: Oral Contraceptives and Women's Career and Marriage Decisions," Journal of Political Economy, University of Chicago Press, vol. 110(4), pages 730-770, August.
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  17. Claudia Olivetti, 2005. "Changes in Women's Hours of Market Work: The Role of Returns to Experience," Boston University - Department of Economics - Macroeconomics Working Papers Series WP2005-008, Boston University - Department of Economics, revised Jun 2006.
  18. Juan Carlos Conesa, 2002. "Educational attainment and timing of fertility decisions," Working Papers in Economics 78, Universitat de Barcelona. Espai de Recerca en Economia.
  19. Altug, Sumru & Miller, Robert A, 1998. "The Effect of Work Experience on Female Wages and Labour Supply," Review of Economic Studies, Wiley Blackwell, vol. 65(1), pages 45-85, January.
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