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Discouraged Worker Effect and Labor Market Behavior of Urban Married Women

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  • DEEKSHA TAYAL

    (Indian Institute of Technology Delhi, New Delhi, India)

  • SOURABH PAUL

    (Indian Institute of Technology Delhi, New Delhi, India)

Abstract

The study investigates the importance of poor local labor market conditions in explaining the labor market behavior of married women in urban India. Using nationally representative employment data, we empirically test for the existence of a discouraged worker effect arising from either of two mechanisms: (i) unexplained gender wage gap, or (ii) degree of underemployment. A three-stage, district-level analysis of female labor market behavior was undertaken, and selectivity bias was controlled for by using censored probit in the second stage and trivariate probit with Geweke–Hajivassiliou–Keane smooth recursive simulator technique in the third stage of this multilevel framework. We find evidence that the wage gap discourages women from participating in the labor market and the prevalence of underemployment, in terms of overqualification by occupation, discourages them from exploring better job opportunities by making on-job search efforts.

Suggested Citation

  • Deeksha Tayal & Sourabh Paul, 2021. "Discouraged Worker Effect and Labor Market Behavior of Urban Married Women," Asian Development Review (ADR), World Scientific Publishing Co. Pte. Ltd., vol. 38(02), pages 93-122, September.
    • Handle: RePEc:wsi:adrxxx:v:38:y:2021:i:02:n:s0116110521500098
    DOI: 10.1142/S0116110521500098
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    More about this item

    Keywords

    discouraged worker effect; female labor force participation; gender-based wage discrimination; local labor market conditions; overqualification; underemployment;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • Z22 - Other Special Topics - - Sports Economics - - - Labor Issues

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