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Dynamic Labour Force Participation of Married Women and Endogenous Work Experience

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Author Info
Eckstein, Zvi
Wolpin, Kenneth I

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Abstract

This paper presents and estimates a dynamic model of married women's labor-force participations and fertility in which the effect of work experience on wages is explicitly taken into account. Because current participation alters future potential earnings, the investment return to work will be an important factor in the current work decision in any forward-looking behavioral model. The model is estimated using the National Longitudinal Survey's mature women's cohort. The authors use the estimates of their model to predict changes in the lifecycle patterns of employment due to changes in schooling, fertility, husband's income, and the magnitude of the experience effect on wages. They find that, although work experience increases the disutility of further work, the effect is overwhelmed by the positive effect of experience on wages, leading to persistence in the employment patterns of these women. In addition, they find that an increase in young children and in husband's income substantially reduces participation, while increased schooling has a powerful positive impact on participation. Copyright 1989 by The Review of Economic Studies Limited.

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Publisher Info
Article provided by Blackwell Publishing in its journal Review of Economic Studies.

Volume (Year): 56 (1989)
Issue (Month): 3 (July)
Pages: 375-90
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Handle: RePEc:bla:restud:v:56:y:1989:i:3:p:375-90

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  2. Michelle Sheran Sylvester, 2007. "The Career and Family Choices of Women: A Dynamic Analysis of Labor Force Participation, Schooling, Marriage and Fertility Decisions," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(3), pages 367-399, July. [Downloadable!] (restricted)
  3. Claudia Olivetti, 2005. "Changes in Women's Hours of Market Work: The Role of Returns to Experience," Boston University - Department of Economics - Macroeconomics Working Papers Series WP2005-008, Boston University - Department of Economics. [Downloadable!]
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  4. Philip Trostel & Ian Walker, 2006. "Education and Work," Education Economics, Taylor and Francis Journals, vol. 14(4), pages 377-399, December. [Downloadable!] (restricted)
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  6. 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. [Downloadable!] (restricted)
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  8. Edward C. Prescott, 1986. "Response to a skeptic," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Fall, pages 28-33. [Downloadable!]
  9. Rebecca M. Blank, 1994. "The Dynamics of Part-Time Work," NBER Working Papers 4911, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Michael P. Keane & Robert M. Sauer, 2006. "Classification Error in Dynamic Discrete Choice Models: Implications for Female Labor Supply Behavior," IZA Discussion Papers 2332, Institute for the Study of Labor (IZA). [Downloadable!]
  11. Cohen-Goldner, Sarit & Eckstein, Zvi, 2004. "Estimating the Return to Training and Occupational Experience: The Case of Female Immigrants," IZA Discussion Papers 1225, Institute for the Study of Labor (IZA). [Downloadable!]
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  12. Elizabeth M. Caucutt & Nezih Guner & John Knowles, 2001. "The Timing of Births: A Marriage Market Analysis," Penn CARESS Working Papers 49355d43c11f2314075e8b54e, UCLA Department of Economics. [Downloadable!]
  13. Pavoni, Nicola & Violante, Giovanni L, 2006. "Optimal Welfare-to-Work Programs," CEPR Discussion Papers 5937, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  14. Atsuko Ueda, 2000. "A Dynamic Decision Model of Marriage, Childbearing, and Labor Force Participation of Women in Japan," Labor and Demography 0004007, EconWPA. [Downloadable!]
  15. Victoria Prowse, 2005. "State Dependence in a Multi-State Model of Employment Dynamics," IZA Discussion Papers 1623, Institute for the Study of Labor (IZA). [Downloadable!]
  16. Islam, Nizamul, 2005. "Dynamic labour force participation of married women in Sweden," Working Papers in Economics 184, Göteborg University, Department of Economics, revised 14 Nov 2005. [Downloadable!]
  17. Victoria Prowse, 2005. "State Dependence in a Multi-state Model of Employment," Economics Papers 2005-W20, Economics Group, Nuffield College, University of Oxford. [Downloadable!]
  18. Andrés Erosa & Luisa Fuster & Diego Restuccia, 2002. "Fertility Decisions and Gender Differences in Labor Turnover, Employment, and Wages," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(4), pages 856-891, October. [Downloadable!] (restricted)
  19. V. Aguirregabir, 1996. "Estimation of Dynamic Decision Models with Corner Solutions: A Model of Price and Inventory Decisions," Econometrics 9603002, EconWPA. [Downloadable!]
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  20. Oddbjørn Raaum & Bernt Bratsberg & Knut Røed & Eva Österbacka & Tor Eriksson & Markus Jäntti & Robin Naylor, 2007. "Marital Sorting, Household Labor Supply, and Intergenerational Earnings Mobility across Countries," IZA Discussion Papers 3037, Institute for the Study of Labor (IZA). [Downloadable!]
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  21. Justin van de Ven, 2006. "The incentive effects of means tested UK retirement benefits -- has the Pension Credit gone too far?," NIESR Discussion Papers 284, National Institute of Economic and Social Research. [Downloadable!]
  22. Helena Skyt, Nielsen & Verner, Mette, 2003. "Why are Well-educated Women not Full-timers?," Working Papers 03-8, University of Aarhus, Aarhus School of Business, Department of Economics. [Downloadable!]
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