IDEAS home Printed from https://ideas.repec.org/p/dlw/wpaper/14-10..html
   My bibliography  Save this paper

Recent Stagnation of Married Women’s Labor Supply: A Life-Cycle Structural Model

Author

Listed:
  • SEONYOUNG PARK

    () (Department of Economics,University of Delaware)

Abstract

This study investigates the effects of changes in various determinants of labor supply on the dramatic changes from the older (the 1950s and earlier) cohorts to the younger (the 1960s and later) cohorts in life-cycle labor supply behavior, and ultimately provides a model-based quantitative explanation of the recent decline in the aggregate labor supply of married women. On the basis of the Current Population Survey data, it first documents that, while life- cycle labor supply profiles are non-overlapping and bell-shaped for the older cohorts, they are roughly flat for the younger cohorts, and from the mid-thirties of the life-cycle, the younger cohorts continue to supply less labor than the 1950s cohort does. Then in a life-cycle model of women’s labor supply, the behavioral changes are explained by a combination of changes in various labor supply determinants, with the opportunity cost of childbearing (as represented by returns to work experience and the rate of human capital depreciation during a nonworking period) being the dominant contributor. In particular, relative to the older cohorts, the higher opportunity cost for the younger cohorts makes them supply more labor at the early stage of the life-cycle, delay childbearing to a later stage, and upon childbearing, stay out of the labor force, other things being constant. A calibration of the model demonstrates that the aggregate labor supply of married women would increase by 1.96 percentage points from 2000 to 2010 if there were no changes between the older and the younger cohorts in the labor supply determinants; however changing the determinants for the same period actually results in a reduction of aggregate labor supply by 1.36 percentage points. Of the 3.32 percentage points of the pseudo-reduction of married women’s aggregate labor supply (difference between the hypothetical 1.96 percentage point increase and the actual 1.36 percentage point reduction), 67 percent is explained by the increased opportunity cost for the younger cohorts, and the rest is accounted for by a combination of changes in the tax code, business cycle conditions, and preferences, among others.

Suggested Citation

  • Seonyoung Park, 2014. "Recent Stagnation of Married Women’s Labor Supply: A Life-Cycle Structural Model," Working Papers 14-10, University of Delaware, Department of Economics.
    • Handle: RePEc:dlw:wpaper:14-10.
    as

    Download full text from publisher

    File URL: http://www.lerner.udel.edu/sites/default/files/ECON/PDFs/RePEc/dlw/WorkingPapers/2014/UDWP2014-10.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Erosa, Andres & Koreshkova, Tatyana, 2007. "Progressive taxation in a dynastic model of human capital," Journal of Monetary Economics, Elsevier, vol. 54(3), pages 667-685, April.
    2. Nada Eissa, 1995. "Taxation and Labor Supply of Married Women: The Tax Reform Act of 1986 as a Natural Experiment," NBER Working Papers 5023, National Bureau of Economic Research, Inc.
    3. Chinhui Juhn & Simon Potter, 2006. "Changes in Labor Force Participation in the United States," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 27-46, Summer.
    4. Berliant, Marcus & Gouveia, Miguel, 1993. "Equal sacrifice and incentive compatible income taxation," Journal of Public Economics, Elsevier, vol. 51(2), pages 219-240, June.
    5. Macunovich, Diane J., 2009. "Reversals in the Patterns of Women's Labor Supply in the U.S., 1976-2009," IZA Discussion Papers 4512, Institute of Labor Economics (IZA).
    6. Dolores Ferrero Martínez & Amaia Iza, 2004. "Skill premium effects on fertility and female labor force supply," Journal of Population Economics, Springer;European Society for Population Economics, vol. 17(1), pages 1-16, February.
    7. Remzi Kaygusuz, 2010. "Taxes and Female Labor Supply," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(4), pages 725-741, October.
    8. Heather Boushey, 2005. "Are Women Opting Out? Debunking the Myth," CEPR Reports and Issue Briefs 2005-36, Center for Economic and Policy Research (CEPR).
    9. Bils, Mark J, 1985. "Real Wages over the Business Cycle: Evidence from Panel Data," Journal of Political Economy, University of Chicago Press, vol. 93(4), pages 666-689, August.
    10. Stephanie Aaronson & Bruce Fallick & Andrew Figura & Jonathan Pingle & William Wascher, 2006. "The Recent Decline in the Labor Force Participation Rate and Its Implications for Potential Labor Supply," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 37(1), pages 69-154.
    11. Alice Nakamura & Masao Nakamura, 1983. "Part-Time and Full-Time Work Behaviour of Married Women: A Model with a Doubly Truncated Dependent Variable," Canadian Journal of Economics, Canadian Economics Association, vol. 16(2), pages 229-257, May.
    12. Kim B. Clark & Lawrence H. Summers, 1982. "Labour Force Participation: Timing and Persistence," Review of Economic Studies, Oxford University Press, vol. 49(5), pages 825-844.
    13. Zvi Eckstein & Kenneth I. Wolpin, 1989. "Dynamic Labour Force Participation of Married Women and Endogenous Work Experience," Review of Economic Studies, Oxford University Press, vol. 56(3), pages 375-390.
    14. Antecol, Heather, 2010. "The Opt-Out Revolution: A Descriptive Analysis," IZA Discussion Papers 5089, Institute of Labor Economics (IZA).
    15. Elizabeth M. Caucutt & Nezih Guner & John Knowles, 2002. "Why Do Women Wait? Matching, Wage Inequality, and the Incentives for Fertility Delay," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(4), pages 815-855, October.
    16. Nezih Guner & Remzi Kaygusuz & Gustavo Ventura, 2012. "Taxation and Household Labour Supply," Review of Economic Studies, Oxford University Press, vol. 79(3), pages 1113-1149.
    17. Anne E. Polivka & Stephen M. Miller, 1998. "The CPS after the Redesign: Refocusing the Economic Lens," NBER Chapters, in: Labor Statistics Measurement Issues, pages 249-289, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Labor Supply; Married Women; Recent Decline; Cohort; Returns to Experience;

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dlw:wpaper:14-10.. 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: (Saul Hoffman). General contact details of provider: http://edirc.repec.org/data/deudeus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.