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Female Labor Supply and Marital Status Decisions: A Life-Cycle Model

Citation

van der Klaauw, Wilbert (1996). Female Labor Supply and Marital Status Decisions: A Life-Cycle Model. Review of Economic Studies, 63(2), 199-235.

Abstract

This paper studies the interdependence between and the determinants of life-cycle marital status and labour force participation decisions of women. A dynamic utility maximization model is presented and estimated using longitudinal data on women from the Panel Study of Income Dynamics. The MLE method employed, involves solving a dynamic programming problem. Further, a minimum distance estimator is proposed which allows for the incorporation of wage data in a computationally simple way. The estimates are used to predict changes in the life-cycle patterns of employment, marriage and divorce due to differences in education, race, the female's earnings and her (potential) husband's earnings. The estimation results indicate that the utility gains to marriage are decreasing in the female's wage rate and increasing in her (potential) husband's earnings, while the opposite is found for gains to working. Ignoring the endogeneity of marital status decisions is shown to lead to an underestimation of own and husband's wage effects on female labour supply.

URL

http://dx.doi.org/10.2307/2297850

Reference Type

Journal Article

Journal Title

Review of Economic Studies

Author(s)

van der Klaauw, Wilbert

Year Published

1996

Volume Number

63

Issue Number

2

Pages

199-235

Reference ID

1497