Dynamic Female Labor Supply. Zvi Eckstein and Osnat Lifshitz. The Walras-Bowley Lecture, Econometric Society Meeting, June 19-22, 2008 Pittsburgh, USA. Outline. Facts and Survey Decomposition of the growth in FE using standard DP: Eckstein and Wolpin (1989)
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Zvi Eckstein and Osnat Lifshitz
The Walras-Bowley Lecture, Econometric Society Meeting, June 19-22, 2008 Pittsburgh, USA
Facts and Survey
Decomposition of the growth in FE using standard DP: Eckstein and Wolpin (1989)
Traditional vs. Modern families: interpreting the growth in FE by cohorts.
Women by cohort
Men composition s.s.
Increase Wages and Close the Gender Gap Labor Supply?Heckman and McCurdy (1980), Goldin (1990), Galor and Weil (1996), Blau and Kahn (2000), Jones, Manuelli and McGrattan (2003)
Social Norms or/and Cost of Children Labor Supply?Goldin (1991), Fernandez, Fogli and Olivetti (2004), Mulligan and Rubinstein (2004)Technical Progress: Greenwood (2004)
Eckstein and Wolpin (EW, 1989) –
The woman chooses employment in order to maximize: Labor Supply?
The household's budget constraint in each period is given by Labor Supply?:
The Mincerian earning function for the woman Labor Supply?:
Budget constraint and wage into utility imply:
Probabilities Labor Supply?
We adopt a logistic form for the job offer probability, the marriage and divorce probability and the probability of having a new child
Backward Solution following Eckstein and Wolpin (1989) and Keane and Wolpin (1987)
How much of the differences between the 1955 cohort and the other cohorts can be explained by changes in:
(1)+(2)+(3) Number of Children
(1)+(2)+(3)+(4) Marital Status
Unexplained : Cost\Utility reduction in Home Production
Schooling composition graph 1945
Schooling composition graph 1965
Schooling composition graph 1975
Model and measurement of employment of females and males for married couples with different cultural family background - Traditional and Modern – as different internal family games.
The Model: Household Game leisure to fit FE?
Ours: At the date of marriage each household is one of two types – unobserved heterogeneity:
3 - out of LF
(b) Accept a potential offer (E) or UE.
quite to become OLF; fired to become UE; Continue employment in a “new” wage.
The household budget constraint
From date of Marriage to 10 years later sub-game perfect solution as DDC with unobserved heterogeneity on type of households.
2 sets of moments: