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

  • Peter Haan

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.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.43903.de/dp538.pdf
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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 538.

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Length: 22 p.
Date of creation: 2005
Date of revision:
Handle: RePEc:diw:diwwpp:dp538
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