Intertemporal Labor Force Participation of Married Women in Germany: A Panel Data Analysis
Ca Foscari University of Venice - Dipartimento di Economia
affiliation not provided to SSRN
Athens University of Economics and Business - Department of Economics
October 1, 2011
University Ca' Foscari of Venice, Dept. of Economics Research Paper Series No. 17/WP/2011
This paper analyzes the intertemporal labor force participation behavior of married women using an annual longitudinal sample from the German Socio-Economic Panel. A predominant characteristic of annual participation behavior is the high degree of persistence in individual participation decisions. We use several model specifications to distinguish among the alternative explanations of this serial persistence: state dependence, individual unobserved heterogeneity, and serial correlation in the transitory error component. Similar to Hyslop (1999), we employ both dynamic “fixed effects” linear probability models as well as several static and dynamic probit models with “random effects” and serially correlated errors. In addition, we apply the estimators proposed by Honoré and Kyriazidou (2000) for dynamic “fixed effects” discrete choice models. We find strong state dependence, and substantial effects for fertility variables. Transitory and permanent non-labor income have in general small effects.
Number of Pages in PDF File: 24
Keywords: State dependence, serial correlation, heterogeneity, panel data, intertemporal labor force participation, GSOEP
JEL Classification: C33, C36, J22
Date posted: October 29, 2011
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