Employment dynamics of Greek married women

Purpose - This paper investigates the employment dynamics of Greek married women. Design/methodology/approach - Longitudinal/panel data for the period 1995‐2001 and dynamic discrete choice models are used for estimation purposes. Findings - It is found that the probability of being employed is influenced by observed individual characteristics (e.g. human capital, fertility and unearned income), while genuine state dependence and unobserved heterogeneity constitute major sources of observed serial persistence. The results show that lagged employment affects current employment decisions in a systematic way, and that the non‐contemporaneous effects of unearned income and fertility correlate with unobserved heterogeneity. The estimated average partial effects reveal that an employed woman int−1 has a probability of being employed intthat is almost 50 percentage points higher than for a non‐employed woman. Practical implications - The presence of state dependence and unobserved heterogeneity imply that the bridging of the female employment gap between Greece and its EU partners is expected to follow a slow, long‐term course. Originality/value - Greek female labour force participation has been studied only under a static analytical framework. This is the first study to investigate employment decisions of Greek married women in an inter‐temporal setting.