Estimating Labor Supply Functions for Married Women.

T. P. Schultz

ResearchPublished 1975

Explores alternative methods for estimating how changes in wealth levels and after-tax wage rates might influence the time married women work in the market labor force, using SEO data for ten age/race groups. Unlike earlier authors, Schultz argues that wives' fertility, past work experience, and current wages are all jointly influenced by past decisions that also determine current employment. Labor supply response to wage rate was positive and large for all groups; elasticity ranged from 2.09 for the oldest and youngest to 0.25 during ages 35 to 44. Response to husband's wage ranged from -0.38 to -1.65. Unlike earlier studies, little evidence was found for a negative work response to assets or nonemployment income. Black and white samples showed similar patterns with whites' elasticities slightly higher. Results imply that a uniform market tax on earnings of husband and wife would change the age composition of the married female work force slightly, but not diminish its size. 114 pp. Bibliog.

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Schultz, T. P., Estimating Labor Supply Functions for Married Women. Santa Monica, CA: RAND Corporation, 1975. https://www.rand.org/pubs/reports/R1265.html.
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