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Does the labour supply of wives respond to husbands' wages? Canadian evidence from micro data and grouped data

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  • René Morissette
  • Feng Hou

Abstract

. Using micro data and grouped data, we assess the extent to which Canadian wives adjusted their labour supply in response to changes in husbands' wages during the period 1980‐2000. Grouped data parameters based on weighted least squares and the unbiased‐error‐in‐variables estimator developed by Devereux (2004, 2007a,b) yield cross‐wage elasticities that are substantially higher (in absolute value) than those derived from OLS regressions run on micro data. Both grouping estimators indicate that the labour supply of Canadian wives responded strongly to changes in husbands' wages during the 1980s. For the 1990s, our estimates of wives' cross‐wage elasticity display greater dispersion. A l'aide de micro données et de données groupées, on établit jusqu'à quel point les épouses canadiennes ont ajusté leur offre de travail en réponse aux changements dans les salaires de leurs époux au cours de la période 1980–2000. Les paramètres (pour les données groupées) dérivés par la méthode des moindres carrés pondérés et de l'estimateur développé par Devereux (2004, 2007a,b) engendrent des élasticités croisées qui sont substantiellement plus grandes (en termes absolus) que ceux dérivés par la méthode des moindres carrés ordinaires en utilisant des micro données. Les deux estimations montrent que l'offre de travail des épouses canadiennes a répondu fortement aux changements dans les salaires des époux au cours des années 80. Pour les années 90, les évaluations des élasticités croisées des salaires montrent une plus grande dispersion.

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  • René Morissette & Feng Hou, 2008. "Does the labour supply of wives respond to husbands' wages? Canadian evidence from micro data and grouped data," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 41(4), pages 1185-1210, November.
  • Handle: RePEc:wly:canjec:v:41:y:2008:i:4:p:1185-1210
    DOI: 10.1111/j.1540-5982.2008.00500.x
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    Cited by:

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    3. Jennifer L. Hook & Eunjeong Paek, 2020. "A Stalled Revolution? Change in Women's Labor Force Participation during Child‐Rearing Years, Europe and the United States 1996–2016," Population and Development Review, The Population Council, Inc., vol. 46(4), pages 677-708, December.
    4. Benoit Dostie, 2012. "Labour Supply and Taxes: New Estimates of the Responses of Wives to Husbands’ Wages," Cahiers de recherche 12-02, HEC Montréal, Institut d'économie appliquée.
    5. Christian Bredemeier & Falko Juessen, 2013. "Assortative Mating and Female Labor Supply," Journal of Labor Economics, University of Chicago Press, vol. 31(3), pages 603-631.
    6. Ren頍orissette & Yuqian Lu & Feng Hou, 2012. "Marriage, cohabitation and women's response to changes in the male wage structure," Applied Economics, Taylor & Francis Journals, vol. 44(19), pages 2499-2516, July.

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