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Expected Interruptions in Labour Force Participation and Sex-Related Differences in Earnings Growth

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  • Yoram Weiss
  • Reuben Gronau

Abstract

The paper analyzes the joint determination of wives' earnings and labor force participation over the life cycle given the interruptions in wives' work careers. The interruptions affect the profitability of the investment in human capital, which in turn determines earnings. The earnings prospects feed back into the participation decision, namely, the decision whether and for how long to drop out of the labor force. The formal analysis compares the age-earnings profiles of persons who drop out of the labor force with those who do not during the pre- and post-interruption period. The comparison is carried out where interruptions are assumed to be exogenous and when they are endogenous. The effect of productivity at home, the initial stock of human capital and its rental value on the length of the interruption is investigated.
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  • Yoram Weiss & Reuben Gronau, 1981. "Expected Interruptions in Labour Force Participation and Sex-Related Differences in Earnings Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 48(4), pages 607-619.
    • Handle: RePEc:oup:restud:v:48:y:1981:i:4:p:607-619.
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    File URL: http://hdl.handle.net/10.2307/2297200
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    1. Jacob Mincer & Solomon Polachek, 1974. "Family Investments in Human Capital: Earnings of Women," NBER Chapters, in: Marriage, Family, Human Capital, and Fertility, pages 76-110, National Bureau of Economic Research, Inc.
    2. Farber, Stephen, 1977. "The Earnings and Promotion of Women Faculty: Comment," American Economic Review, American Economic Association, vol. 67(2), pages 199-206, March.
    3. Heckman, James J & Willis, Robert J, 1977. "A Beta-logistic Model for the Analysis of Sequential Labor Force Participation by Married Women," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 27-58, February.
    4. Yoram Ben-Porath, 1967. "The Production of Human Capital and the Life Cycle of Earnings," Journal of Political Economy, University of Chicago Press, vol. 75(4), pages 352-352.
    5. Steven H. Sandell & David Shapiro, 1980. "Work Expectations, Human Capital Accumulation, and the Wages of Young Women," Journal of Human Resources, University of Wisconsin Press, vol. 15(3), pages 335-353.
    6. Sherwin Rosen, 1972. "Learning and Experience in the Labor Market," Journal of Human Resources, University of Wisconsin Press, vol. 7(3), pages 326-342.
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