This collection of original essays brings econometric theory to bear on the problem of estimating the labor force participation of women. Five scholars here examine, both theoretically and empirically, the determinants of women's wages in the market, the value of their home time, and the factors that affect their employment.
Originally published in 1980.
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Front Matter Front Matter (pp. ivi) 
Table of Contents Table of Contents (pp. viiviii) 
PREFACE PREFACE (pp. ix2)FINIS WELCH 
INTRODUCTION INTRODUCTION (pp. 324)JAMES P. SMITHIn the last decade, research on female labor supply has expanded at a rate which even exceeds the remarkable rate of growth of the female labor force. The initial intellectual impulse was the work of Jacob Mincer (1962) who contributed a powerfully simple explanation of discrepancies between time series and crosssectional market work patterns for white married women using the standard decomposition of income and price effects of traditional price theory. In his seminal paper on the allocation of time (1965), Gary Becker generalized the role of time in economic activity, so that time became a central element in decisions...

CHAPTER 1 ESTIMATING LABOR SUPPLY FUNCTIONS FOR MARRIED WOMEN CHAPTER 1 ESTIMATING LABOR SUPPLY FUNCTIONS FOR MARRIED WOMEN (pp. 2589)T. PAUL SCHULTZThere are ample reasons to refine nonexperimental crosssectional estimates of labor supply parameters in light of continuing advances in conceptual and statistical methodology (Cain and Watts, 1973). First, from a policy standpoint, more precise parameters of longrun labor supply functions would help in the design and administration of welfare reform legislation.
Second, and central to the research strategy of this investigation, there is a growing awareness that many aspects of family decisionmaking over the life cycle are interrelated, implying that unexplained deviations or disturbances in individual behavior are related over time and across different behavioral outcomes (Nerlove and Schultz, 1970)....

CHAPTER 2 MARRIED WOMEN’S LABOR SUPPLY: A COMPARISON OF ALTERNATIVE ESTIMATION PROCEDURES CHAPTER 2 MARRIED WOMEN’S LABOR SUPPLY: A COMPARISON OF ALTERNATIVE ESTIMATION PROCEDURES (pp. 90118)JOHN COGANA central problem in estimating married women’s labor supply functions is that no market wage is observed for women who do not work. Several empirical approaches have been devised to deal with this problem. One approach (Kalachek and Raines, 1970; Boskin, 1973; Schultz, Chapter 1) is to use only those women who work as the sample for estimation. Another approach (Hall, 1973; Leibowitz, 1972; and Schultz, Chapter 1) uses the entire sample of observations. Both of these conventional procedures, hereafter termed Models I and II, respectively, use a predicted wage, obtained from an auxiliary wage equation estimated on the subsample...

CHAPTER 3 HOURS AND WEEKS IN THE THEORY OF LABOR SUPPLY CHAPTER 3 HOURS AND WEEKS IN THE THEORY OF LABOR SUPPLY (pp. 119165)GIORA HANOCHThe basic static model of labor supply determination has been widely used, both theoretically and empirically. It is characterized by many simplifying assumptions: one individual, one period, two commodities (“consumption” and “leisure”), no uncertainty; and a time constraint, a nonwage income, and a fixed wage rate, all given exogenously.¹
In recent literature, various extensions and modifications of this basic model have been offered to account for presumed or observed deviations of its simplifying features from the real world, and to integrate it into broader contexts, such as family and household decisions, lifetime human and nonhuman capital accumulation, occupational choice and...

CHAPTER 4 ASSETS AND LABOR SUPPLY CHAPTER 4 ASSETS AND LABOR SUPPLY (pp. 166205)JAMES P. SMITHThis paper examines the role of assets in labor supply functions. In recent work, variables measuring assets have been used with increasing frequency to measure the response of hours worked to nonwagerelated income.¹ Empirical labor supply studies have previously used an aggregate of all current period nonearnings income to estimate pure income effects.² The estimated income slopes were disappointing because the income variable either had the wrong sign (positive), implying that leisure was an inferior good, or it was sufficiently small so that compensated ownwage slopes in the labor supply equation remained negative. In addition, the estimated income response exhibited...

CHAPTER 5 SAMPLE SELECTION BIAS AS A SPECIFICATION ERROR WITH AN APPLICATION TO THE ESTIMATION OF LABOR SUPPLY FUNCTIONS CHAPTER 5 SAMPLE SELECTION BIAS AS A SPECIFICATION ERROR WITH AN APPLICATION TO THE ESTIMATION OF LABOR SUPPLY FUNCTIONS (pp. 206248)JAMES J. HECKMANIn this chapter, the bias that results from using nonrandomly selected samples to estimate behavioral relationships is shown to arise because of a missing data problem. In contrast with the standard omitted variable problem in econometrics, in which certain explanatory variables of a regression model are lacking, the problem of sample selection bias arises because data are missing on the dependent variable of an analysis. Regressions estimated on the data available from the nonrandom sample will not, in general, enable the analyst to estimate parameters of direct interest to economists. Instead, such regression coefficients confound meaningful structural parameters with the...

CHAPTER 6 A MULTIVARIATE MODEL OF LABOR SUPPLY: METHODOLOGY AND ESTIMATION CHAPTER 6 A MULTIVARIATE MODEL OF LABOR SUPPLY: METHODOLOGY AND ESTIMATION (pp. 249326)GIORA HANOCHTheoretical and empirical economists have spent much time and effort studying the individual labor supply function. But the more thoroughly they examined it, the less stable and more complex it seemed, with new conceptual and statistical problems surfacing at every stage. In Chapter 3 of this volume, I analyzed from a theoretical perspective several aspects of labor supply that were previously overlooked. The goal of this study is to provide a framework and a feasible method of estimation of the theory outlined in Chapter 3. Using this framework, the model is estimated with a sample of white married women in...

CHAPTER 7 LABOR SUPPLY WITH COSTS OF LABOR MARKET ENTRY CHAPTER 7 LABOR SUPPLY WITH COSTS OF LABOR MARKET ENTRY (pp. 327364)JOHN COGANRecent empirical research on married women’s labor supply has considerably enhanced knowledge of the role that economic and demographic factors play in shaping labor market behavior of this demographic group. There are, however, several factors that have received only superficial attention. One in particular is the costs of work. Despite its potential empirical importance, the existence of either fixed or variable costs of work is typically assumed away in empirical analyses. In this chapter I develop a simple model of labor supply with time and money costs of labor market entry, and develop a statistical procedure for estimating labor supply...

BIBLIOGRAPHY BIBLIOGRAPHY (pp. 365376) 
INDEX INDEX (pp. 377384) 
Back Matter Back Matter (pp. 385387)