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Intertemporal Labor Force Participation of Married Women in Germany: A Panel Data Analysis


  • Enrica Croda

    () (Department of Economics, University Of Venice C� Foscari)

  • Ekaterini Kyriazidou

    (Athens University of Economics and Business)

  • Iannis Polycarpou

    (Athens University of Economics and Business)


This paper analyzes the intertemporal labor force participation behavior of married women using an annual longitudinal sample from the German Socio-Economic Panel. A predominant characteristic of annual participation behavior is the high degree of persistence in individual participation decisions. We use several model specifications to distinguish among the alternative explanations of this serial persistence: state dependence, individual unobserved heterogeneity, and serial correlation in the transitory error component. Similar to Hyslop (1999), we employ both dynamic �fixed effects� linear probability models as well as several static and dynamic probit models with �random effects� and serially correlated errors. In addition, we apply the estimators proposed by Honor� and Kyriazidou (2000) for dynamic �fixed effects� discrete choice models. We find strong state dependence, and substantial effects for fertility variables. Transitory and permanent non-labor income have in general small effects.

Suggested Citation

  • Enrica Croda & Ekaterini Kyriazidou & Iannis Polycarpou, 2011. "Intertemporal Labor Force Participation of Married Women in Germany: A Panel Data Analysis," Working Papers 2011_17, Department of Economics, University of Venice "Ca' Foscari".
  • Handle: RePEc:ven:wpaper:2011_17

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    References listed on IDEAS

    1. Hotz, V Joseph & Kydland, Finn E & Sedlacek, Guilherme L, 1988. "Intertemporal Preferences and Labor Supply," Econometrica, Econometric Society, vol. 56(2), pages 335-360, March.
    2. Bonin, Holger & Euwals, Rob, 2001. "Participation Behavior of East German Women after German Unification," IZA Discussion Papers 413, Institute for the Study of Labor (IZA).
    3. Carrasco, Raquel, 2001. "Binary Choice with Binary Endogenous Regressors in Panel Data: Estimating the Effect of Fertility on Female Labor Participation," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(4), pages 385-394, October.
    4. Whitney K. Newey & Frank Windmeijer, 2005. "GMM with many weak moment conditions," CeMMAP working papers CWP18/05, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    5. Michael P. Keane & Robert M. Sauer, 2009. "Classification Error in Dynamic Discrete Choice Models: Implications for Female Labor Supply Behavior," Econometrica, Econometric Society, vol. 77(3), pages 975-991, May.
    6. Bowsher, Clive G., 2002. "On testing overidentifying restrictions in dynamic panel data models," Economics Letters, Elsevier, vol. 77(2), pages 211-220, October.
    7. Mroz, Thomas A, 1987. "The Sensitivity of an Empirical Model of Married Women's Hours of Work to Economic and Statistical Assumptions," Econometrica, Econometric Society, vol. 55(4), pages 765-799, July.
    8. Bo E. Honoré & Ekaterini Kyriazidou, 2000. "Panel Data Discrete Choice Models with Lagged Dependent Variables," Econometrica, Econometric Society, vol. 68(4), pages 839-874, July.
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    More about this item


    State dependence; serial correlation; heterogeneity; panel data; intertemporal labor force participation; GSOEP.;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply


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