This paper examines changes in the labor supply behavior of married women from 1980 to 2000 using March Current Population Survey (CPS) data. The authors find that married women's labor supply function for annual hours shifted sharply to the right in the 1980s, with little shift in the 1990s. This shift explains the more rapid growth of female labor supply in the 1980s compared to the 1990s. Additionally, married men's real wages fell slightly in the 1980s but rose in the 1990s, contributing to the slowdown in the growth of women's labor supply in the 1990s.
A major new development was a dramatic reduction in women's own wage elasticity over both decades. Women's own wage elasticity fell by 50 to 56 percent, while their cross wage elasticity fell by 38 to 47 percent in absolute value. These patterns hold up under various alternative specifications, including corrections for selectivity bias, income taxes, measurement error, and omitted variables. The reduction in labor supply elasticities implies that government policies such as income taxes have a smaller distortionary effect on the economy now than in the past.
The paper also discusses recent research on female labor supply and the econometric issues involved in estimating labor supply models. It highlights the importance of considering the family context in labor supply research and the impact of changes in wage offers, nonlabor income, and demographic factors on labor supply trends. The authors find that married women's labor supply became less responsive to their husbands' wages over time, with the most significant changes occurring in the 1980s.
The paper presents empirical results showing that married women's labor supply is positively and significantly related to their own log wages. The own wage elasticity for married women fell substantially over the 1980s and 1990s, with the most significant declines occurring in the 1990s. The authors also find that the impact of husbands' wages on wives' labor supply decreased over time, with the effects becoming smaller in absolute value.
The paper concludes that the changes in married women's labor supply behavior reflect a shift from "jobs" to "careers" and a response to continued high divorce rates. The findings suggest that married women's labor supply became less sensitive to their own wages and their husbands' wages over time, with the most significant changes occurring in the 1980s. The results also indicate that government policies such as income taxes have a smaller distortionary effect on the economy now than in the past.This paper examines changes in the labor supply behavior of married women from 1980 to 2000 using March Current Population Survey (CPS) data. The authors find that married women's labor supply function for annual hours shifted sharply to the right in the 1980s, with little shift in the 1990s. This shift explains the more rapid growth of female labor supply in the 1980s compared to the 1990s. Additionally, married men's real wages fell slightly in the 1980s but rose in the 1990s, contributing to the slowdown in the growth of women's labor supply in the 1990s.
A major new development was a dramatic reduction in women's own wage elasticity over both decades. Women's own wage elasticity fell by 50 to 56 percent, while their cross wage elasticity fell by 38 to 47 percent in absolute value. These patterns hold up under various alternative specifications, including corrections for selectivity bias, income taxes, measurement error, and omitted variables. The reduction in labor supply elasticities implies that government policies such as income taxes have a smaller distortionary effect on the economy now than in the past.
The paper also discusses recent research on female labor supply and the econometric issues involved in estimating labor supply models. It highlights the importance of considering the family context in labor supply research and the impact of changes in wage offers, nonlabor income, and demographic factors on labor supply trends. The authors find that married women's labor supply became less responsive to their husbands' wages over time, with the most significant changes occurring in the 1980s.
The paper presents empirical results showing that married women's labor supply is positively and significantly related to their own log wages. The own wage elasticity for married women fell substantially over the 1980s and 1990s, with the most significant declines occurring in the 1990s. The authors also find that the impact of husbands' wages on wives' labor supply decreased over time, with the effects becoming smaller in absolute value.
The paper concludes that the changes in married women's labor supply behavior reflect a shift from "jobs" to "careers" and a response to continued high divorce rates. The findings suggest that married women's labor supply became less sensitive to their own wages and their husbands' wages over time, with the most significant changes occurring in the 1980s. The results also indicate that government policies such as income taxes have a smaller distortionary effect on the economy now than in the past.