Household Interaction Impact on Married Female Labor Supply. Zvi Eckstein and Osnat Lifshitz. Introduction. 2. Introduction (Cont.). 3. The Model: Household Dynamic Game. Two types of household
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Zvi Eckstein and Osnat Lifshitz
Husband & wife are symmetric, act simultaneously after state is realized, taking the other person actions as given.
The household budget constraint:
The probability of having an additional child is given as (Van der Klaauw, 1996):
function of the woman's employment state in the previous period, the woman's age and education and those of her husband, current number of children and the age of the youngest child.
is the standard normal distribution function.
The probability of divorce:
function of how long the couple has been married (t), current number of children, the female's education and the employment states of the woman and her husband.
(Husband employment and earnings are uncertain when she makes the decision independently)
PSID - 863 couples who got married between 83-84, start from the date of the wedding.
10 years (40 quarters) sample (at most).
During the sample period:
2 sets of moments: