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State Dependence and Female Labor Supply in Germany: The Extensive and the Intensive Margin

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  • Peter Haan

Abstract

In this paper I develop an intertemporal discrete choice model of labor supply. The framework incorporates the nonlinearities in the household budget set and accounts for state dependence in labor supply. Based on panel data for Germany (SOEP), I estimate this model using a dynamic conditional logit panel data model with random effects. The estimation results show that state dependence is significantly positive at the extensive margin, yet modest or non existing on the intensive margin. Using the Markov chain property, I derive short and long term labor supply elasticities on both the intensive and extensive margin. The labor supply elasticities differ significantly between the short and long run.

Suggested Citation

  • Peter Haan, 2005. "State Dependence and Female Labor Supply in Germany: The Extensive and the Intensive Margin," Discussion Papers of DIW Berlin 538, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp538
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Schnabel Claus, 2016. "United, Yet Apart? A Note on Persistent Labour Market Differences between Western and Eastern Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 236(2), pages 157-179, March.
    2. Arne Uhlendorff, 2006. "From No Pay to Low Pay and Back Again?: A Multi-State Model of Low Pay Dynamics," Discussion Papers of DIW Berlin 648, DIW Berlin, German Institute for Economic Research.
    3. Katja Coneus & Kathrin Göggel & Grit Muehler, 2007. "Determinants of Child Care Participation," SOEPpapers on Multidisciplinary Panel Data Research 72, DIW Berlin, The German Socio-Economic Panel (SOEP).
    4. Alexander Mosthaf & Thorsten Schank & Claus Schnabel, 2014. "Low-wage employment versus unemployment: Which one provides better prospects for women?," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-17, December.
    5. Peter Haan & Arne Uhlendorff, 2006. "Estimation of multinomial logit models with unobserved heterogeneity using maximum simulated likelihood," Stata Journal, StataCorp LP, vol. 6(2), pages 229-245, June.
    6. Johannes Geyer & Viktor Steiner, 2007. "Short-Run and Long-Term Effects of Childbirth on Mothers' Employment and Working Hours across Institutional Regimes: An Empirical Analysis Based on the European Community Household Panel," Discussion Papers of DIW Berlin 682, DIW Berlin, German Institute for Economic Research.
    7. Katrin Sommerfeld, 2009. "Older Babies - More Active Mothers? How Maternal Labor Supply Changes as the Child Grows," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 129(2), pages 227-240.
    8. Kristian Orsini, 2007. "Is Belgium "Making Work Pay" ?," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 50(2), pages 193-220.

    More about this item

    Keywords

    State dependence; Labor supply of married women; Panel data; Unobserved heterogeneity;

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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