stopping agents from cheating abstract when a principal hires two or more agents to work in a correlated environment each agent s reward will depend on the other s performance unfortunately with just the usual optimal incentive constrained contracts being offered the agents strictly prefer to play equilibrium strategies other than those desired by the principal they cheat however the principal can use a more subtle contractual mechanism to stop them from cheating at no extra cost this mechanism uses one agent to police the other and exploits certain properties of the optimal contracts

an empirical analysis of life cycle fertility and female labor supply this paper examines us household fertility and female labor supply over the life cycle using data from the panel study of income dynamics the authors investigate how maternal time inputs and market expenditures on offspring as well as the benefits they yield their parents vary with ages of offspring and influence female labor supply and contraceptive behavior the econometric framework combines a female labor supply model and a contraceptive choice index function it also accounts for the fact that conceptions are not perfectly controllable events using longitudinal data on married couples the authors estimate these equations and test alternative specifications of the technologies governing child care the findings suggest that while parents cannot perfectly control conceptions variations in child care costs do affect life cycle spacing of births furthermore the results demonstrate the gains of modeling the linkages between female labor supply and fertility behavior at the household level authors modified

liquidity constraints and labor supply abstract in this paper we shed some light on how restrictions in financial markets the so called liquidity constraints might act in affecting labour supply decisions of italian workers one way to neutralize the existence of binding liquidity constraints is simply by supplying additional labor instead of reducing consumption we estimate whether resorting to additional labor supply as a smoothing consumption device is at work by using the italian survey of households income and wealth shiw the longitudinal dimension of the shiw dataset allows us to control for individual unobserved heterogeneity we also use an iv strategy to address the endogeneity of our measure for credit constraints in labor supply equations due to time varying factors our results show that liquidity constraints increase the intensity in the supply of men s labor constrained men work on average 4 hours more than their unconstrained counterpart self employed workers turn out to be more sensitive to binding liquidity constraints possibly because they are more flexible in adjusting the intensity of their labor supply

female labour supply and marital status decisions a life cycle model 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

identifying the response of fertility to financial incentives summary while using financial incentives to increase fertility has become relatively common the effects of such policies are difficult to assess we propose an identification strategy that relies on the fact that the variation in wages induces variation in benefits and tax credits among comparable households we implement our approach by estimating a discrete choice model of female participation and fertility using individual data from the french labor force survey and a detailed representation of the french tax benefit system our results suggest that financial incentives have had a significant effect on fertility decisions in france as an example we simulate the effects of an additional unconditional child credit of 150 euros per month the effects are strongest for the third child copyright 2013 john wiley sons ltd

on the determinants of employer demand for part time workers this paper uses a survey of private establishments to examine the determinants of the firm s relative demand for partand full time workers the elasticity of substitution of part time for full time workers is about 1 5 considerably lower than previous estimates with aggregate data the results indicate that the quasi fixed labor costs have a negative impact on the proportion of part timers in a firm s work force

the effect of food stamps on labor supply a bivariate selection model abstract although there is a large literature on the effects of u s transfer programs on labor supply this is the first such study of the food stamp program we model the nonlinearity and nonconvexity of the budget constraint and use maximum likelihood methods to estimate hours of work functions for female heads of household the largest recipient group in the program we also model the joint response to afdc and food stamps and we account for the existence of a significant number of eligible households who do not participate in the programs a three equation bivariate selection model is estimated on a sample of eligible households with maximum likelihood

a joint dynamic model of fertility and work of married women this article estimates a dynamic model of fertility and labor supply of married women drawn from the national longitudinal survey of young women 1968 91 it distinguishes part time and full time employment sectors which differ by pecuniary and nonpecuniary returns and transferability of human capital the model with unobserved heterogeneity in earning ability and preferences for children fits the data and produces reasonable forecasts of labor force participation in decisions the estimates unpack important features of the persistence in labor market decisions intertemporal substitution of leisure over the life cycle and the effect of work interruptions due to childbirth on lifetime utility

the effect of work experience on female wages and labour supply this paper develops and implements a semiparametric estimator for investigating with panel data the importance of human capital and time nonseparable preferences to females when aggregate shocks are present it provides a set of conditions for making statistical inferences about agents expectations of their correlated future choices from a short panel under the assumption that observed allocations are pareto optimal a dynamic model of female labour supply and participation is estimated in which experience on the job raises future wages and time spent off the job in the past directly affects current utility or indirectly through productivity in the nonmarket sector

incentive effects of the u s welfare system a review the author would like to acknowledge support for prior work on this topic from the u s department of health and human services and helpful comments from three anonymous referees rebecca blank howard chernick john fitzgerald irwin garfinkel peter gottschalk edward gramlich david greenberg judith gueron james heckman v joseph hotz robert hutchens michael keane frank levy larry mead michael murray robert plotnick anuradha rangarajan philip robins howard rolston jeffrey smith and daniel weinberg all opinions and errors are those of the author alone

a longitudinal analysis of white women s wages according to human capital theory women s work participation decisions will strongly affect their wages and wage growth we test human capital predictions about how labor force withdrawals both past and prospective part time work experience and working in male rather than in female jobs affect wages and wage growth for white women we do this by estimating a wage change model for the years 1967 1979 for a national sample of white women we find that wages drop immediately following withdrawals but that this is followed by a rapid wage growth so that the net loss in wages from dropping out of the labor force is small we further find that wage growth is not significantly lower in female than in male jobs but that part time work experience does not lead to significant wage growth in either male or female jobs

the career costs of children this paper analyzes the life cycle career costs associated with child rearing and decomposes their eects into unearned wages as women drop out of the labor market loss of human capital and selection into more child friendly occupations we estimate a dynamic life cycle model of fertility occupational choice and labor supply using detailed survey and administrative data for germany for numerous birth cohorts across dierent regions we use this model to analyze both the male female wage gap as it evolves from labor market entry onward and the eect of pro fertility policies we show that a substantial portion of the gender wage gap is explainable by realized and expected fertility and that the long run eect of policies encouraging fertility are considerably lower than the short run eects typically estimated in the literature

duopoly in exhaustible resource exploration and extraction strategic considerations of exploration and extraction are investigated in a two player two period two stage perfect equilibrium framework relative to two plant monopoly the duopolists explore more and extract more period by period a mixed game in which there is co operation upstream in exploration and cournot competition down stream in quantitites extracted is investigated we also note that increasing returns to scale in exploration can introduce an unstable solution with a corner solution the presumed stable equilibrium

women s labor market reactions to family disruptions shadow price varies over time it is shown that the change in a woman s labor supply is related to the deviation of the husband s actual work hours from the expected amount the estimation indicates that the largest response to the loss of husband s income occurs with a divorce or separation smaller effects are noted for widowhood husband s unexpected unemployment or health change m x easuring reactions of a married woman s labor supply to shocks to her household presents a research problem that is best addressed in a dynamic framework but recent empirical research on this topic has been conducted in a static environment in this study a dynamic model which allows for uncertainty is developed and empirically implemented with the goal of measuring the labor force response of a woman to changes in her husband s contribution to household earnings the model suggests a simple form to quantify the size of an unexpected shock to the household this shock resulting from changes in her marital status a worsening of her husband s health or her husband becoming unemployed the basic behavioral assumption is that a woman forms expectations of her husband s likely contribution to household income based on their prior experiences and she then reacts to the particular circumstances encountered in a given year in an uncertain world shocks almost always occur where a shock is defined as the difference between

does it pay for women to volunteer this article estimates the economic and noneconomic returns to volunteering for prime aged women estimates of a dcdp model indicate that an extra year of volunteer experience increases wage offers by 8 5 in future part time work and by 2 6 in future full time work on average working for free increases lifetime earnings by 16 7 the economic returns to volunteering are more important than the noneconomic returns in increasing lifetime utility the model also reveals an adverse selection mechanism into volunteering that helps explain why reduced form regressions of the returns to working for free will likely be downward biased

the estimation of a joint wage hours labor supply model in this paper the standard cross sectional static model of labor supply is modified to make the wage endogenous and a joint wage hours model is estimated the econometric technique addresses the non linearity of the budget constraint by approximating the constraint by a series of discrete points the results show that the budget constraint is indeed nonlinear that hours affect the wage quadratically that true wage elasticities are lower as a result and that the model fits the hours distribution much better than the standard tobit model

fertility and female employment dynamics in europe the effect of using alternative econometric modeling assumptions we investigate the direct and long run effects of fertility on employment in europe estimating dynamic models of labor supply under different assumptions regarding the exogeneity of fertility and modeling assumptions related to initial conditions unobserved heterogeneity and serial correlation in the error terms we find overall large direct and long run effects of giving birth on employment probabilities and these effects differ considerably across countries we find that within countries the results are sensitive to the statistical assumption made on initial conditions the inclusion of serial correlation and the assumption of strict exogeneity of children however the pattern across countries is robust to these assumptions we show that such patterns are largely consistent with prevailing institutional differences related to the flexibility of the labor markets and family policies copyright 2009 john wiley sons ltd

learning about and exploiting exhaustible resource deposits of uncertain size the kemp loury model of a single uncertain deposit is cast in an n state framework and optimal programs characterized robson s problem of arranging the optimal sequence of uncertain deposits is recast and a market failure involving the jointness of learning about deposit size and gaining revenue from extracted ore is isolated the value of learning by preliminary extraction is characterized and extensions to the problem of arranging optimal sequences are noted this abstract was borrowed from another version of this item

life cycle employment and fertility across institutional environments in this paper we formulate a dynamic utility maximization model of female labor force participation and fertility choices and estimate approximate decision rules using data on married women in italy spain and france the pattern of estimated state dependence effects across countries is consistent with aggregate patterns in part time employment and child care availability suggesting that labor market rigidities and lack of child care options are important sources of state dependence simulations of the model reveal that italian and spanish women would substantially increase their participation rates were they to face the french institutional environment

how income transfer programs affect work savings and the income distribution a critical review for helpful comments on earlier drafts we thank without implicating moses abramovitz yves balcer john bishop alan blinder richard burkhauser michael darby irwin garfinkel alan gustman daniel hamermesh martin holmer george jakubson robert lampman paul menchik robert moffitt michael murray joseph quinn timothy smeeding eugene smolensky barbara wolfe and two anonymous referees

preference for output price uncertainty by the non renewable resource extracting firm abstract we establish a general preference for price uncertainty by the price taking risk neutral non renewable resource extracting firm with orthodox convex extraction costs we prove that the relevant value function for profits over an interval is convex in output price

the determinants of black white differences in early employment careers search layoffs quits and endogenous wage growth this paper studies the transition from school to full time employment and subsequent labor mobility during the first five postschooling years for several recent cohorts of black and white male terminal high school graduates using unique data from the 1979 youth cohort of the national longitudinal surveys of labor market experience a constrained optimization model of labor force dynamics is implemented empirically integrating features of models previously described in the literature the estimates of the model provide quantitative evidence on underlying structural differences in labor market constraints faced by blacks and whites for example while blacks have overall a substantially smaller wage return to work experience and face a less disperse wage offer distribution blacks face a higher probability of receiving job offers

a structural model of multiple welfare program participation and labor supply work on estimating the labor supply effects of high marginal tax rates in welfare programs has been hindered by the difficulty of estimating the effects of participation in multiple welfare programs simultaneously the authors solve this problem by applying methods of simulation estimation to a model of labor supply and multiple program participation the results show asymmetric wage and tax rate effects with fairly large wage elasticities of labor supply but very inelastic responses to moderate changes in cumulative marginal tax rates implying that high welfare tax rates do not necessarily induce major reductions in work effort copyright 1998 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

measuring the value of children by sex and age using a dynamic programming model one of the important determinants of fertility is the value of children as perceived by parents this paper estimates gender and age specific values of children using a dynamic programming model the underlying hypothesis is that observed fertility outcome for any couple is the solution to their life cycle optimization problem findings from the korean data indicate that children impose net costs when young and net benefits when old both the early costs and the later benefits are larger for male children than female children and for better educated women than lowereducated women simulation studies which use estimated values of children suggest that a decrease in the costs of abortion and pre natal gender screening tests may raise the male birth ratio through gender selective abortions

type of employer and fertility of working women does working in the public sector or in a large private firm matter this work investigates how fertility rates of working women have been influenced by employer characteristics public versus private sector and small versus large firms and features of the employment contracts using a representative sample of italian working women in the last 30 years of the twentieth century in particular we find that women working in the public sector have a higher probability of having a child during a working spell than women working in the private sector furthermore women working in large private sector firms who enjoy stronger employment protection have a higher probability of having a child than those working in smaller firms in turn more stable contracts also increase the likelihood of having a child during a working spell results are robust to controlling for individual unobserved heterogeneity and for the possible endogeneity of working in the public sector copyright oxford university press

the dynamic demand for part time and full time labour this paper explores the hypothesis that part time work plays a distinct role in the adjustment strategies of firms in the face of economic shocks dynamic labour demand equations for part time and full time labour estimated from monthly data from the us current population survey indicate that part time labour is adjusted more rapidly in a number of industries furthermore the adjustment of the two types of labour is not independent disequilibrium in one slows the rate of adjustment of the other these results lend support to the notion that part time labour provides an important source of dynamic flexibility in some industries policies that reduce the relative costs of adjusting part time labour and changes in the economic environment that make flexibility more important to firms may explain some of the growth in part time employment that has taken place over the last several decades part time employment has expanded significantly over the last several decades in both north america and europe standing at about 15 5 of the labour force in germany in the early 1990s 12 2 in france and 18 9 in the united states houseman 1995 this paper explores the hypothesis that part time work plays a distinct and important role in the adjustment strategies of firms in the face of economic shocks as suggested by a variety of authors and substantiated by a small amount of survey evidence zeytinoglu 1992 firms may be motivated to hire part time workers partly because such workers can provide them with more flexibility in adjusting their labour forces obtaining evidence on this hypothesis can generate insight into one of the potential causes of the growth of part time employment part time labour may be more flexible than full time labour for a number of reasons if there are positive training costs short term layoffs will be costly when workers are not available for rehire when conditions improve if parttime workers on short term layoff are less likely to seek other employment adjustment costs relating to training will be lower for them workers who choose full time employment may on average have stronger preferences for regular schedules and constant incomes than do workers who are employed on a part time basis varying hours or employment therefore may cause greater discontent among full time workers than part time workers resulting in reduced productivity or compensatory wage increases finally firms that pay efficiency wages may segment their labour forces into primary workers who have greater job security and secondary workers who act to absorb shocks to product demand as rebitzer and taylor 1991 show providing primary workers with a credible promise of future employment lowers the wage rate required to ensure that these workers do not shirk for all the reasons just described part time workers may form a natural source of secondary workers for firms pursuing this strategy

the incentive value of inventory and cross training in modern manufacturing this paper shows that major components of modern manufacturing processes such as inventory management and cross training play a significant control role in our model workers possess information that is critical to efficient ongoing operations an organizational design that motivates workers to optimally apply this information leverages both the production schedule and worker management communication management s use of these controls results in work in process wip inventory that appears excessive from a pure job scheduling perspective but is optimal when control issues are considered empirical work testing pure job scheduling theories of modern manufacturing practices has yielded mixed results we provide control related interpretations for these empirical findings and also provide novel predictions regarding the link between inventory levels and the nature of operational information asymmetries overall our model highlights the importance of recognizing both control and scheduling issues when analyzing production processes

labor supply and taxes a survey i survey the male and female labor supply literatures focusing on implications for effects of wages and taxes for males i describe and contrast results from three basic types of model static models especially those that account for nonlinear taxes life cycle models with savings and life cycle models with both savings and human capital for women more important distinctions are whether models include fixed costs of work and whether they treat demographics like fertility and marriage and human capital as exogenous or endogenous the literature is characterized by considerable controversy over the responsiveness of labor supply to changes in wages and taxes at least for males it is fair to say that most economists believe labor supply elasticities are small but a sizeable minority of studies that i examine obtain large values hence there is no clear consensus on this point in fact a simple average of hicks elasticities across all the studies i examine is 0 30 several simulation studies have shown that such a value is large enough to generate large welfare costs of income taxation for males i conclude that two factors drive many of the differences in results across studies one factor is use of direct vs ratio wage measures with studies that use the former tending to find larger elasticties another factor is the failure of most studies to account for human capital returns to work experience i argue that this may lead to downward bias in elasticity estimates in a model that includes human capital i show how even modest elasticities as conventionally measured can be consistent with large welfare costs of taxation

wage offers and full time and part time employment by british women strong evidence in support of the hypothesis that women receive lower wage offers in part time jobs than in full time jobs is provided by estimation of wage offer functions for british women which control for self selection into these two types of jobs analysis of married women s employment decisions indicates that the difference in a woman s expected wage offers between full time and part time employment is an important determinant of whether she works full time while husband s income mainly affects the decision of whether to work in addition it appears that women who work despite having observed characteristics that discourage employment are much more likely to work part time

simultaneously modeling the supply of weeks and hours of work among female household heads this paper explores the differential nature of labor supply decisions regarding weeks of work per year and hours of work per week among female household heads a model of labor supply that separates the weeks hours decision is presented and estimated allowing for simultaneity in the weeks hours decision as well as for the presence of either fixed costs or weeks and hours constraints the results indicate that not only are weeks and hours decisions separate from the labormarket participation decision but they are also quite different from each other although they appear to be simultaneously determined

disability capacity for work and the business cycle an international perspective important policy issues arise from the high and growing number of people claiming disability benefits for reasons of incapacity for work in oecd countries economic conditions play an important part in explaining both the stock of disability benefit claimants and inflows to and outflows from that stock employing a variety of cross country and country specific household panel data sets as well as administrative data we find strong evidence that local variations in unemployment have an important explanatory role for disability benefit receipt with higher total enrolments lower outflows from rolls and often higher inflows into disability rolls in regions and periods of above average unemployment in understanding the nature of the cyclical fluctuations and trends in disability it is important to distinguish between work disability and health disability the former is likely to be influenced by economic conditions and welfare programmes while the latter evolves in a slower fashion with medical technology and demographic changes there is little evidence of health disability being related to the business cycle so cyclical variations are driven by work disability the rise in unemployment due to the current global economic crisis is expected to increase the number of disability insurance claimants

an estimable dynamic stochastic model of fertility and child mortality this paper develops a finite horizon dynamic stochastic model of discrete choice with respect to life cycle fertility within an environment where infant survival is uncertain the model yields implications for the number timing and spacing of children a tractable estimation method is developed for the linear constraint quadratic utility case that is intimately tied to the dynamic optimization problem and the method is applied to malaysian household data estimation is based on integrating the numerical solution of the dynamic programming model of behavior with a maximum likelihood procedure

tax credits labour participation and home production in the netherlands we set up a dynamic reduced form model of labour market participation for women who balance career and motherhood the model accounts for the occurrence of future child birth and early retirement

do generous parental leave policies help top female earners generous government mandated parental leave is generally viewed as an effective policy to support women s careers around childbirth but does it help women to reach top positions in the upper pay echelon of their firms using longitudinal employer employee matched data for the entire norwegian population we address this question exploiting a series of reforms that expanded paid leave from 30 weeks in 1989 to 52 weeks in 1993 the representation of women in top positions has only moderately increased over time and career profiles of female top earners within firms are significantly different from those of their male counterparts the reforms did not affect and possibly decreased the probability for women to be at the top over their life cycle we discuss some implications of this result to put into perspective the design of new family friendly policy interventions

the effect of property rights and audit information quality on team incentives for inventory reduction we analyze how limited contractibility and the informational quality of audits affect inventory levels and the optimality of individual versus team based production we use a two period agency model in which contractibility is limited and agents meet a fixed delivery quota each period a costly audit is triggered in any period if the delivery quota of output for the period is not met we show that the informativeness of the audit plays a crucial role in resolving coordination problems between agents when they are organized as a team when the audit is perfectly informative about agent productivity and inventory levels team based production is optimal the team meets its quota even though in equilibrium the audit never takes place if the audit is not perfectly informative about inventory levels we show that team based production typically induces agents to endogenously reduce inventory levels and could even result in agents adopting a zero inventory policy when the audit is completely uninformative individual production is superior to team based production

the quantitative role of child care for female labor force participation and fertility consistent with facts for a cross section of oecd countries i document that the labor force participation rate of west german mothers with children aged zero to two exceeds the corresponding child care enrollment rate whereas the opposite is true for mothers with children aged three to mandatory school age i develop a life cycle model that explicitly accounts for this age dependent relationship through various types of non paid and paid child care the calibrated version of the model is used to evaluate two policy reforms concerning the supply of subsidized child care for children aged zero to two these counterfactual policy experiments suggest that the lack of subsidized child care constitutes indeed for some females a barrier to participate in the labor market and depresses fertility

can financial incentives reduce the baby gap evidence from a reform in maternity leave benefits abstract in this paper i assess whether earnings dependent maternity leave positively impacts fertility and narrows the baby gap between highly educated high earning and less educated low earning women i exploit a major maternity leave benefit reform in germany that considerably increased the financial incentives by up to 21 000 eur for highly educated and higher earning women using the large differential changes in maternity leave benefits across education and income groups in a differences in differences design i estimate the causal impact of the reform on fertility for up to 5 years in addition to demonstrating an up to 23 increase in the fertility of tertiary educated women i find a positive statistically significant effect of increased benefits on fertility driven mainly by women at the middle and upper end of the earnings distribution overall the results suggest that earnings dependent maternity leave benefits which compensate women according to their opportunity cost of childbearing could successfully reduce the fertility rate disparity related to mothers education and earnings

female labour supply and household employment shocks maternity leave as an insurance mechanism this paper investigates the role of unpaid maternity leave in providing household insurance against paternal employment shocks the main outcome is the timing of a mothers return to work after having a child exploiting the us family and medical leave act we find that mothers eligible for maternity leave speed up their return to work in response to a paternal shock with the conditional probability of being in work 49 higher than in households with no unpaid maternity leave further evidence is provided on the insurance role of unpaid maternity leave through i no significant interaction between paid maternity leave and the paternal shock and ii smoothing of consumption effects of the shock for households covered by unpaid leave

life cycle labor supply with human capital accumulation a dynamic model of labor supply under uncertainty with endogenous human capital accumulation is developed and estimated using 1968 81 panel study of income dynamics male panel data given a learning by doing technology for human capital investment and a translog utility function structural parameters for preferences and technology are estimated from the orthogonality conditions implied by the euler equations assuming rational expectations the parameter estimates conform to economic theory simulations of the model suggest that the intertemporal labor supply elasticity with endogenous wages will rise over the lifecycle producing different policy implications than typical models with exogenous wages and constant intertemporal elasticities copyright 1989 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

dynamic female labor supply the increase in female employment and participation rates is one of the most dramatic changes to have taken place in the economy during the last century however while the employment rate of married women more than doubled during the last 50 years that of unmarried women remained almost constant to empirically analyze these trends we estimate a female dynamic labor supply model using an extended version of eckstein and wolpin 1989 to compare the various explanations in the literature for the observed trends this dynamic model provides a much better fit to the life cycle employment pattern than a static version of the model and a standard static reduced form model heckman 1979 the main finding using the dynamic model is that the rise in education levels accounts for about 33 percent of the increase in female employment and the rise in wages and narrowing of the gender wage gap account for another 20 percent while about 40 percent remains unexplained by observed household characteristics we show that this unexplained portion can be empirically attributed to cohort specific changes in preferences or the costs of child rearing and household maintenance finally the decline in fertility and the increase in divorce rates account for only a small share of the increase in female employment rates

the role of part time work in women s labor market choices over time at any point in time over the last decade approximately 37 percent of nonelderly adult women were not employed while 18 percent worked part time and 45 percent worked full time while much research has explored the static labor market participation and hours decisions of women 1 there has been almost no exploration of how the pattern of labor market involvement varies among individual women over time is there one group of women who always work full time and another that is always out of the labor market or do most individual women move between different levels of labor market involvement over time part time work may be particularly important in labor market dynamics it has been suggested that part time work provides a bridge or a stepping stone into fulltime employment for women who have been absent from the labor market yet knowing little about the dynamics of individual labor supply we do not know if most part timers are in that state transitionally or if they are permanently involved in part time work this paper focuses on labor market changes over a nine year period among a sample of adult women the questions it addresses are 1 what are the patterns of labor market involvement that we find among individual women over time 2 what role does part time work play in the dynamic patterns of women s labor market involvement and is there evidence that part time work is a more transitional category than full time work or nonwork 3 what factors induce women to move between part time work full time work and nonwork

dynamic labour force participation of married women and endogenous work experience this paper presents and estimates a dynamic model of married women s labour force participation and fertility in which the effect of work experience on wages is explicitly taken into account because current participation alters future potential earnings the investment return to work will be an important factor in the current work decision in any forward looking behavioural model the model is estimated using the national longitudinal surveys mature women s cohort we use the estimates of our model to predict changes in the lifecycle patterns of employment due to changes in schooling fertility husband s income and the magnitude of the experience effect on wages we find that although work experience increases the disutility of further work the effect is overwhelmed by the positive effect of experience on wages leading to persistence in the employment patterns of these women in addition we find that an increase in young children and in husband s income substantially reduces participation while increased schooling has a powerful positive impact on participation this paper presents an estimable structural dynamic model of married women s labour force participation and fertility in which wages are stochastic and work experience or cumulative participation is endogeneous the model is structural in the sense that the parameters which are estimated are contained in the fundamental relationships governing behaviour namely the utility function and the constraints the model is contained in the class of models which describe the life cycle capital accumulation process with endogeneous labour supply such as weiss 1972 and heckman 1976 it is closest in spirit to that of weiss and gronau 1981 1 the basic feature of their model and ours is that labour market participation affects future wages which then affects future participation the investment return to current work will necessarily be taken into account in any forward looking optimizing model as weiss and gronau note estimates of labour supply models have ignored the inherent behavioural dynamics associated with a positive wageexperience profile there is no adequate empirical treatment of the human capital investment dimension of the labour force participation decision in the literature heckman and willis 1977 have studied a sequential discrete choice model of the labour force participation of married women in a reduced form framework their work

the econometrics of nonlinear budget sets traditional empirical analysis of consumer demand has usually made the assumption of linear budget sets that is the consumer is assumed to purchase any desired quantity at a constant price subject to a budget constraint the major exception to this framework is the analysis of demand when some goods are rationed 2 in the rationed case the price is constant up to a quantity limit in contrast to the rationed case here i consider the situation where the price varies with the amount of the good purchased empirical situations with nonconstant prices come readily to mind and of course they have received much recent attention from theorists since mirrlees 44 paper on optimal nonlinear taxation the following examples are meant to give a partial listing of cases when nonlinear budget sets occur i electricity prices many electric utilities engage in declining block pricing that is the marginal price of successive kwh s of electricity decrease at a given number of points determined by total demand thus the budget set is piecewise linear houthakker 36 was the first to propose an approach to this problem taylor 51 analyzes the problem at length and hausman kinnucin and mcfadden 31 use an instrumental variables estimator to provide consistent estimates of the demand function

what determines family structure i introduction the most prevalent type of family structure in which children in the united states are raised today is the traditional one in which both biological parents are present in the home and married but in the past 30 40 years it has become increasingly common for children to experience alternative family structures such as living with the mother with no father present the mother and a stepfather and cohabiting parents children who grow up in a family with married biological parents have better education employment marriage childbearing and psychological outcomes on average than their counterparts who spend substantial parts of childhood living in alternative family structures 1 these differences are generally quite large and dwarf the effects of income and maternal employment the evidence suggests that at least part of the association between family structure and child outcomes is causal there is much still to be learned about the consequences of growing up in alternative family structures but there is a consensus that family structure matters for child development in contrast there is much less known about the determinants of family structure the proximate determinants of family structure are well studied demographic behaviors union formation and dissolution transition from cohabitation to marriage and fertility both in and outside of unions but the implications of adult demographic behaviors for the family structure experiences of children depend crucially on interactions among these behaviors for example the impact on a child of being born out of wedlock is likely to depend on whether the mother and biological father subsequently marry or cohabit and if so how soon after the birth of the child the impact on a child of the dissolution of a union may depend on whether the man in the union was the child s biological father or a stepfather and on the duration of the union economic theories of family formation and dissolution suggest a number of observable factors that affect the demographic behaviors that determine family structure 2 these include the wage rates available to men and women the tax and transfer incentives to cohabit marry and bear children the legal environment governing divorce and child support provided by absent parents and the state of the marriage market many studies have examined the effects of these factors on the family structure experiences of children but most have taken a narrow approach for example a typical study examines the impact of changes over time in one or two determinants of family structure without considering the implications of simultaneous changes in other factors most studies examine only one or two of the key demographic behaviors that determine the family structure experienced by children for example one study might focus only on entry to cohabitation and marriage whereas another study examines childbearing while single and a third study analyzes marital dissolution in this article we propose a new approach to analyze the determinants of the family structure experiences of children our approach has four distinguishing features first we jointly model union formation union dissolution and childbearing decisions previous analyses have integrated some of these behaviors in a single model but none has integrated the full range of behaviors needed for a thorough analysis of family structure a major feature of change in recent years has been de linking of marriage and childbearing decisions hence it is crucial to recognize as emphasized by ellwood and jencks 2004 that marriage and childbearing are in fact distinct decisions and that treating single parenthood as one decision rather than the consequence of related but distinct union and childbearing decisions misses key elements of changes in behavior furthermore bumpass and lu 2000 point out that a substantial part of the increase in single parenthood in the last three decades can be accounted for by a rise in the presence of children with cohabiting parents but child outcomes are worse in cohabitation than marriage other things equal

expected interruptions in labor force participation and sex related differences in earnings growth the paper analyzes the joint determination of wives earnings and labor force participation over the life cycle given the interruptions in wives work careers the interruptions affect the profitability of the investment in human capital which in turn determines earnings the earnings prospects feed back into the participation decision namely the decision whether and for how long to drop out of the labor force the formal analysis compares the age earnings profiles of persons who drop out of the labor force with those who do not during the pre and post interruption period the comparison is carried out where interruptions are assumed to be exogenous and when they are endogenous the effect of productivity at home the initial stock of human capital and its rental value on the length of the interruption is investigated this abstract was borrowed from another version of this item

children and their parents a review of fertility and causality childbearing decisions are not made in isolation they are taken in concert with decisions regarding work marriage health investments and stocks as well as many other observable and non observable considerations drawing causal inferences regarding the effect of additional children on family outcomes is complicated by these endogenous factors this paper lays out the issues involved in estimating the effect of additional child births on family outcomes and the assumptions underlying the range of estimators and methodologies proposed in the economic literature the common pitfalls of these estimators are discussed as well as their potential to bias our interpretation of the effect additional births have on children and parents both in the existing literature and in future work in the face of changing patterns of childbearing and child rearing

part week work and women s unemployment the large increase in the labor force participation of women during recent times has been accompanied by a less noted but also important change in their employment picture the growth of part week work while the participation rate of women was increasing from 37 in 1957 to 49 in 1977 the percentage of female employment in part week jobs was rising from 20 to 27 u s office of the president 1970 1978 2 economists have linked these changes to both the secular rise of the unemployment rate in the united states and the differential between female and male unemployment friedman 1977 niemi 1974 perry 1970 for example friedman states

job mobility and the market for lawyers this paper studies the life cycle career choices of law school graduates using unique data from the university of michigan law school the model assumes that these graduates act according to the optimal solution of a dynamic optimization problem in which they sequentially choose among five employment sectors the employment sectors are differentiated by pecuniary and nonpecuniary returns promotion and dismissal probabilities and the extent of transferability of human capital the estimation of the model reveals a self selection mechanism based on unobserved heterogeneity in abilities and expected future returns which plays a critical role in reproducing the sector specific nonmonotonic separation hazards observed in the data the underlying self selection mechanism also has implications for policy interventions in the market for lawyers such as loan forgiveness programs

a problem with the negative income tax abstract the goal of a negative income tax is to increase the work incentives of welfare recipients this note points out that it may not do so and empirical simulations show that this is a real world possibility

women s college decisions how much does marriage matter this article investigates the sequential college attendance decision of young women and quantifies the effect of marriage expectations on their decision to attend and graduate from college a dynamic choice model of college attendance labor supply and marriage is formulated and structurally estimated using panel data from the nlsy79 the model is used to simulate the effects of no marriage benefits and finds that the predicted college enrollment rate will drop from 58 0 to 50 5 using the estimated model the college attendance behavior for a younger cohort from the nlsy97 is predicted and used to validate the behavioral model

children and their parents labor supply evidence from exogenous variation in family size although theoretical models of labor supply and the family are well developed there are few credible estimates of key empirical relationships in the work family nexus this study uses a new instrumental variable the sex composition of the first two births in families with at least two children to estimate the effect of additional children on parents labor supply in the united states instrumental variables estimates using the sex mix are substantial but smaller than the corresponding ordinary least squares ols estimates moreover unlike the ols estimates the female labor supply effects estimated using sex mix instruments appear to be absent among more educated women and women with high wage husbands we also find that married women who have a third child reduce their labor supply by as much as women in the full sample while there is no relationship between wives child bearing and husbands labor supply excerpt

modeling employment dynamics with state dependence and unobserved heterogeneity this study extends existing work on the dynamics of labor force participation by distinguishing between full time and part time employment and by allowing unobserved heterogeneity in the effects of previous employment outcomes children and education on labor supply behavior in addition unobserved heterogeneity may feature autocorrelation and correlated random effects the results reveal significant variation in the effects of children and education on labor supply behavior moreover the omission of random coefficients and autocorrelation biases estimates of state dependencies on average temporary shocks that increase the rate of part time employment lead subsequently to lower rates of nonemployment than do shocks that temporarily increase the rate of full time work the article has additional online supplementary material

appropriation of common access natural resources through exploration the relevance of the open loop concept in this paper the open loop equilibrium is rehabilitated as a sensible concept for analyzing common property situations in a model of natur al resource exploration in which the sole motivation to explore prior to extraction arises from a strategic incentive to preempt competito rs a consistency rule to the exploration game is applied under which the commonality of reserves is preserved even if strategies are open loop under this rule the so often claimed efficiency of the common property open loop equilibrium is lost copyright 1988 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

effective tax rates and guarantees in the afdc program 1967 1982 estimates of effective tax rates on earned and unearned income and estimates of effective guarantees in the afdc program by state are provided for the period 1967 1982 the results indicate that effective real guarantees fell every year from 1967 to 1981 but stabilized in 1982 effective tax rates on unearned income rose steadily from 1967 to 1981 and took a particularly large additional jump in 1982 effective tax rates on earned income fell after 1967 but then gradually rose throughout the 1970s until 1982 when they took a much larger jump thus guarantees fell and tax rates rose over the 1970s as tight budgets forced states to restrict benefits and in the early 1980s tax rates were pushed even higher by federal legislation

female labour supply human capital and welfare reform we estimate a dynamic model of employment human capital accumulation including education and savings for women in the united kingdom exploiting tax and benefit reforms and use it to analyze the effects of welfare policy we find substantial elasticities for labor supply and particularly for lone mothers returns to experience which are important in determining the longer term effects of policy increase with education but experience mainly accumulates when in full time employment tax credits are welfare improving in the u k increase lone mother labor supply and marginally reduce educational attainment but the employment effects do not extend beyond the period of eligibility marginal increases in tax credits improve welfare more than equally costly increases in income support or tax cuts

a structural explanation of recent changes in life cycle labor supply and fertility behavior of married women in the united states abstract this study documents and explains important changes in the life cycle labor supply and fertility behavior of married women in the united states from the 1950s to more recent cohorts the younger cohorts relative to the 1950s supply more labor at earlier stages of the life cycle delay motherhood to later stages without reducing the fertility rate and upon childbearing show a greater tendency to stay out of the labor force in a life cycle model for married couples in which a household makes decisions on fertility as well as labor supply consumption and savings all the behavioral changes are jointly and quantitatively explained by a combination of changes in various labor supply fertility determinants with the increased returns penalties to work non work experience being the dominant contributor the results survive a series of robustness tests including endogenizing education choice and assortative marriage

profiles of fertility labour supply and wages of married women a complete life cycle model of all the major economic and demographic events in the postwar united states period the trends in fertility and female labour supply stand out as among the most dramatic fertility rates after their depression lows rose unexpectedly after world war ii far more than was anticipated as an adjustment to the war and continued to rise until the late 1950 s and early 1960 s when they again took an unexpected turn downward all the way to today s historical lows female labour force participation rates continuing their historical climb grew throughout the postwar period at an increasing pace by 4 percentage points during the 1950 s by 5 percentage points during the 1960 s and by 8 percentage points during the 1970 s these two trends are of course closely related for most married women have traditionally spent at least some minimal time out of the labour force while caring for their own children thus for example the slower growth rate of labour force participation rates in the 1950 s is probably connected with the higher fertility rates in that period in this paper a complete model of female labour supply and fertility choice is constructed and estimated the model is more complete than previous models in several respects first labour supply and fertility decisions are modelled as completely joint in the same sense as the consumption of two goods is joint second both are modelled as life cycle decisions that is as decisions regarding sequences of labour supply and fertility events rather than levels of the same hence the timing of both is important third the life cycle path of wage rates is made endogenous to the model given a wage function showing the effect of work experience on future wages the path of wages is determined automatically by the chosen path of labour supply which in turn is related to fertility decisions that require some period of non work econometrically the three profiles for labour supply fertility and wages are estimated with a full information maximum likelihood technique that solves several econometric problems such as the problem of heterogeneity of tastes the selectivity problem of missing wage rates for non workers and the problem of simultaneous equations bias the value of constructing a complete model is best seen by briefly reviewing past work in this area the modern literature in the area is based upon the work of becker

introduction to the jbes symposium on program and policy evaluation meyer each of the articles in this group relies on changes in state or provincial policies over time to identify the effect of policy changes states instituting reforms constitute the treatment group whereas nonreforming states are assumed to provide a valid control group the treatment control parison is made after differencing state observations across years for example in their article on canadian national health insurance jon gruber and maria hanratty use the fact that canadian provinces introduced national health insurance at different times to estimate the effect of national health insurance on changes in labor market outcomes the presumption is that contemporaneous changes in neighboring provinces provide a control for labor market trends that are unrelated to health care reform similarly in their article on minimum wages taeil kim and lowell taylor use the variation afforded by california s increase in the state minimum wage in the late 1980s the presumption underlying this work is that within narrowly defined sectors engaged in retail trade changes in employ

the effects of the 1978 pregnancy discrimination act on female labor supply this article analyzes the effects of the 1978 pregnancy discrimination act pda on the labor force participation rates of married women by estimating a dynamic model of labor force participation results show that the pda increased the labor force participation rate of pregnant women by 8 2 percentage points of women with a child less than one year old by 3 4 percentage points and of women with older children by 1 5 percentage points counterfactual policy simulations show that the provision of unpaid leave will increase the labor force participation rate of women with older children by an additional 3 7 percentage points

explaining and forecasting results of the self sufficiency project this paper studies the self sufficiency project ssp a controlled randomized experiment concerning welfare by estimating a model of endogenous skill accumulation multidimensional job opportunities and time varying opportunity costs of labour market time methods for estimating dynamic programming models with unobserved heterogeneity are extended to account for unexpected policy interventions and endogenous sample selection and initial conditions parameters are identified and consistently estimated by imposing optimal responses to the exact form of the ssp earnings supplement and the experimental program which induces exogenous variation between treatment groups and within groups as treatment progresses the estimated model tracks primary outcomes well in and out of sample except for underestimating trends in the sample of new welfare applicants predictions from counterfactual experiments run counter to non structural results reported elsewhere and they suggest that details of the ssp s design are critical for interpretation of results the separate ssp plus treatment may have longer lasting and more generalized impacts than the in sample impacts suggest copyright oxford university press

natural natural experiments in economics the recent literature exploiting natural events as natural experiment instruments is reviewed to assess to what extent it has advanced empirical knowledge a weakness of the studies that adopt this approach is that the necessary set of behavioral market and technological assumptions made by the authors in justifying their interpretations of the estimates is often absent the methodology and findings from twenty studies are summarized and simple economic models are used to elucidate the implicit assumptions made by the authors and to demonstrate the sensitivity of the interpretations of the findings to the relaxation of some of these assumptions