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Labor Supply of Mothers: The Role of Time Discounting

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  • Haan, Peter
  • Haywood, Luke
  • Schneider, Ulrich

Abstract

We estimate a dynamic life-cycle model of labor supply with a focus on time preferences for women. We extend the dynamic discrete choice model to accommodate potentially non-exponential discounting. Variation in job protection regulations provides identifying variation to test time discounting, affecting future and not current payoffs. Reforms to job protection legislation in Germany constitute a natural experiment to identify the key time preference parameters of our model. We shed light on the importance of time-inconsistent preferences on maternal labor market return. The structure of time preferences will importantly affect cost and effectiveness of labor market policies.

Suggested Citation

  • Haan, Peter & Haywood, Luke & Schneider, Ulrich, 2016. "Labor Supply of Mothers: The Role of Time Discounting," VfS Annual Conference 2016 (Augsburg): Demographic Change 145751, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc16:145751
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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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