The Responsiveness of Married Women's Labor Force Participation to Income and Wages: Recent Changes and Possible Explanations

Bradbury, Katharine L.; Katz, Jane

doi:10.2139/ssrn.1324339

“…The National Statistical Office (2018) reports an increasing divorce rate over the most recent ten-year period that make women reluctant to change their working hours; this may be the reason for the decline in elasticity in the third time period. In addition, the promotion of female education and gender equality has led to a shrinking gap in earnings and led women to care more about their own development; these factors may also account for the recent decline in the elasticity (Goldin 1990;Bradbury and Katz 2008).…”

Section: Check For Changes In Elasticity Over Timementioning

confidence: 99%

The inversion of married women's labour supply and wage: Evidence from Thailand

Liao

¹

,

Paweenawat

²

2021

Asian-Pac Economic Lit

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This study investigates the labour supply behaviour of married Thai women with reference to their own and their spouse's wages. Controlling for spousal education and number of children, the main findings indicate an inverse relationship between married women's labour supply and wages, contrary to the evidence from developed countries. The estimated own wage elasticity ranges from −1.70 to −2.40 and the cross elasticity ranges from −0.16 to −0.17, indicating that the impact of own wage on labour supplied is much larger than spouse's wage. The results from disaggregation classified according to different socioeconomic backgrounds also show negative elasticities between own and spouses' wage across all subgroups, except for those with university degrees and higher income.

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“…There has long existed a broad consensus among researchers that the female labor supply is more elastic than that of males. This belief has been challenged in a provocative set of recent papers that found female labor supply elasticities-both with respect to wage and income-have been in a remarkable decline since the 1980's (Goldin, 1990;Blau and Kahn 2007;Bishop et al 2009;Heim 2007;Macunovich and Pegula, 2010;Bradbury and Katz, 2008;Hotchkiss, 2005;Juhn and Murphy, 1997). With male labor supply elasticity believed to be already close to zero, the finding that female elasticities have converged toward those of males has significant implications for tax policy and optimal tax rates.…”

Section: Introductionmentioning

confidence: 99%

Declining Female Labor Supply Elasticities in the U.S. And Implications for Tax Policy: Evidence from Panel Data

Kumar

¹

,

Liang

²

2015

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Recent work has provided compelling evidence of a long-term decline in US female labor supply elasticities with respect to wages and to income. While previous work used crosssectional data from the Current Population Survey (CPS), we reexamine the trend for married women using panel data from the Panel Study of Income Dynamics (PSID) from 1980 to 2006. We find evidence in support of a long-term decline in married females' labor supply elasticities on the participation margin, but less so on the hours margin. We also extend the analysis to investigating the implications of these results on welfare effects of tax reforms. Policy simulations indicate that shrinking elasticities, mostly concentrated on the participation margin, have contributed to a dramatic decline in welfare gains from actual and potential tax reforms since the 1980's.

show abstract

“…This belief has been challenged in a provocative set of recent papers that found female labor supply elasticities-both with respect to wage and income-have been in a remarkable decline since the 1980's (Goldin, 1990;Blau and Kahn 2007;Bishop et al 2009;Heim 2007;Macunovich and Pegula, 2010;Bradbury and Katz, 2008;Hotchkiss, 2005;Juhn and Murphy, 1997). With male labor supply elasticity believed to be already close to zero, the finding that female elasticities have converged toward those of males has significant implications for tax policy and optimal tax rates.…”

Section: Introductionmentioning

confidence: 99%

Declining Female Labor Supply Elasticities in the U.S. and Implications for Tax Policy: Evidence from Panel Data

Kumar

¹

,

Liang

²

2015

View full text Add to dashboard Cite

Recent work has provided compelling evidence of a long-term decline in US female labor supply elasticities with respect to wages and to income. While previous work used crosssectional data from the Current Population Survey (CPS), we reexamine the trend for married women using panel data from the Panel Study of Income Dynamics (PSID) from 1980 to 2006. We find evidence in support of a long-term decline in married females' labor supply elasticities on the participation margin, but less so on the hours margin. We also extend the analysis to investigating the implications of these results on welfare effects of tax reforms. Policy simulations indicate that shrinking elasticities, mostly concentrated on the participation margin, have contributed to a dramatic decline in welfare gains from actual and potential tax reforms since the 1980's.

show abstract

The Responsiveness of Married Women's Labor Force Participation to Income and Wages: Recent Changes and Possible Explanations

Cited by 5 publications

References 46 publications

The inversion of married women's labour supply and wage: Evidence from Thailand

The inversion of married women's labour supply and wage: Evidence from Thailand

Declining Female Labor Supply Elasticities in the U.S. And Implications for Tax Policy: Evidence from Panel Data

Declining Female Labor Supply Elasticities in the U.S. and Implications for Tax Policy: Evidence from Panel Data

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