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Labor Supply, Wealth Dynamics and Marriage Decisions

Author

Listed:
  • Shintaro Yamaguchi

    (McMaster University)

  • Claudia Ruiz

    (World Bank)

  • Maurizio Mazzocco

    (UCLA)

Abstract

Using the Panel Study of Income Dynamics (PSID), we provide evidence that labor supply, household production, savings, and marital decisions are linked. We then develop and estimatea model that has the ability to generate the patterns observed in the data. Using the estimated model we first show that it is important to consider the link between labor supply, household production, wealth, and marriage choices to understand household behavior and its response to policy changes. We then use the model to evaluate the effect of the Earned Income Tax Credit (EITC) and other subsidy programs on individual decisions and welfare.

Suggested Citation

  • Shintaro Yamaguchi & Claudia Ruiz & Maurizio Mazzocco, 2014. "Labor Supply, Wealth Dynamics and Marriage Decisions," 2014 Meeting Papers 210, Society for Economic Dynamics.
    • Handle: RePEc:red:sed014:210
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    References listed on IDEAS

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    Cited by:

    1. Wen, Jiayi & Huang, Haili, 2024. "Parental health penalty on adult children’s employment: Gender differences and long-term consequences," Journal of Health Economics, Elsevier, vol. 95(C).
    2. Laura Blow & Martin Browning & Mette Ejrnæs, 2009. "Marriage and Consumption," CAM Working Papers 2009-07, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
    3. Ortigueira, Salvador & Siassi, Nawid, 2013. "How important is intra-household risk sharing for savings and labor supply?," Journal of Monetary Economics, Elsevier, vol. 60(6), pages 650-666.
    4. Stefania Marcassa, 2011. "Divorce Laws and Divorce Rate in the U.S," Working Papers 2011-009, Human Capital and Economic Opportunity Working Group.
    5. Stefania Marcassa, 2009. "Divorce laws and divorce rate in the U.S," Working Papers halshs-00575088, HAL.
    6. Bick, Alexander & Choi, Sekyu, 2011. "Life-cycle consumption: can single agent models get it right?," MPRA Paper 30910, University Library of Munich, Germany.
    7. Alexandros Theloudis & Jorge Velilla & Pierre-André Chiappori & J. Ignacio Gimenéz-Nadal & José Alberto Molina, 2022. "Commitment and the Dynamics of Household Labor Supply," Working Papers 2022-042, Human Capital and Economic Opportunity Working Group.
    8. Eugene Choo & Shannon Seitz & Aloysius Siow, 2008. "The Collective Marriage Matching Model: Identification, Estimation and Testing," Working Papers tecipa-340, University of Toronto, Department of Economics.
    9. Bick, Alexander & Choi, Sekyu, 2013. "Revisiting the effect of household size on consumption over the life-cycle," Journal of Economic Dynamics and Control, Elsevier, vol. 37(12), pages 2998-3011.
    10. Alessandra Voena, 2015. "Yours, Mine, and Ours: Do Divorce Laws Affect the Intertemporal Behavior of Married Couples?," American Economic Review, American Economic Association, vol. 105(8), pages 2295-2332, August.
    11. Raquel Fern?ndez & Joyce Wong, 2014. "Unilateral Divorce, the Decreasing Gender Gap, and Married Women's Labor Force Participation," American Economic Review, American Economic Association, vol. 104(5), pages 342-347, May.
    12. Laurens Cherchye & Thomas Demuynck & Bram De Rock & Frederic Vermeulen, 2017. "Household Consumption When the Marriage Is Stable," American Economic Review, American Economic Association, vol. 107(6), pages 1507-1534, June.
    13. Steve Laufer & Ahu Gemici, 2009. "Marriage and Cohabitation," 2009 Meeting Papers 1191, Society for Economic Dynamics.
    14. Nawid Siassi, 2019. "Inequality and the Marriage Gap," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 31, pages 160-181, January.
    15. Hamish Low & Costas Meghir & Luigi Pistaferri & Alessandra Voena, 2018. "Marriage, Labor Supply and the Dynamics of the Social Safety Net," Cowles Foundation Discussion Papers 2121, Cowles Foundation for Research in Economics, Yale University.
    16. Giovanni Gallipoli & Laura Turner, 2009. "Household Responses to Individual Shocks: Disability and Labor Supply," Working Paper series 04_09, Rimini Centre for Economic Analysis.
    17. Pierre André Chiappori & José Ignacio Gimenez Nadal & José Alberto Molina & Alexandros Theloudis & Jorge Velilla, 2020. "Intrahousehold Commitment and Intertemporal Labor Supply," LISER Working Paper Series 2020-11, Luxembourg Institute of Socio-Economic Research (LISER).
    18. Maurizio Mazzocco & Claudia Ruiz & Shintaro Yamaguchi, 2014. "Labor Supply and Household Dynamics," American Economic Review, American Economic Association, vol. 104(5), pages 354-359, May.
    19. Marcel Fischer & Natalia Khorunzhina, 2019. "Housing Decision With Divorce Risk," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(3), pages 1263-1290, August.
    20. THELOUDIS Alexandros, 2018. "Wages and Family Time Allocation," LISER Working Paper Series 2018-06, Luxembourg Institute of Socio-Economic Research (LISER).
    21. Keane, Michael P. & Todd, Petra E. & Wolpin, Kenneth I., 2011. "The Structural Estimation of Behavioral Models: Discrete Choice Dynamic Programming Methods and Applications," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 4, pages 331-461, Elsevier.
    22. Laura Turner & Aloysius Siow & Gueorgui Kambourov, 2014. "Relationship Skills in the Labor and Marriage Markets," 2014 Meeting Papers 155, Society for Economic Dynamics.
    23. Laura Turner & Giovanni Gallipoli, 2011. "Social Security, Endogenous Retirement, and Intrahousehold Cooperation," 2011 Meeting Papers 935, Society for Economic Dynamics.

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