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Econometrics 2016, 4(1), 1; doi:10.3390/econometrics4010001

How Credible Are Shrinking Wage Elasticities of Married Women Labour Supply?

Department of Economics, School of Oriental and African Studies (SOAS), University of London, Thornhaugh Street, Russell Square, London WC1H 0XG, UK
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Academic Editor: Kerry Patterson
Received: 12 October 2015 / Revised: 3 December 2015 / Accepted: 10 December 2015 / Published: 25 December 2015
View Full-Text   |   Download PDF [1976 KB, uploaded 25 December 2015]   |  

Abstract

This paper delves into the well-known phenomenon of shrinking wage elasticities for married women in the US over recent decades. The results of a novel model experimental approach via sample data ordering unveil considerable heterogeneity across different wage groups. Yet, surprisingly constant wage elasticity estimates are maintained within certain wage groups over time. In addition to those constant wage elasticity estimates, we find that the composition of working women into different wage groups has changed considerably, resulting in shrinking wage elasticity estimates at the aggregate level. These findings would be impossible to obtain had we not dismantled and discarded the instrumental variable estimation route. View Full-Text
Keywords: labour supply wage elasticity; instrumental variable; selection bias; parameter stability labour supply wage elasticity; instrumental variable; selection bias; parameter stability
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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Qin, D.; van Huellen, S.; Wang, Q.-C. How Credible Are Shrinking Wage Elasticities of Married Women Labour Supply? Econometrics 2016, 4, 1.

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