Labor Supply and the Value of the Housewife's Time.

by John F. Cogan

Purchase

Purchase Print Copy

 FormatList Price Price
Add to Cart Paperback42 pages $20.00 $16.00 20% Web Discount

This report evaluates four alternative procedures for estimating the value of the married woman's time and the parameters of her labor supply function: (1) Labor Supply Model I uses as the sample for estimation only those women who are labor force participants. (2) Labor Supply Model II uses the entire sample, regardless of labor force status. Two versions of Model II are considered: ordinary least squares and limited dependent variable (Tobit) regression. (3) R. Gronau's procedure estimates the price of the nonworking woman's time directly from data on market wage rates and labor force participation rates. (4) Heckman's maximum likelihood approach estimates the parameters of the market wage and labor supply functions simultaneously. Gronau's procedure is found inferior, on methodological grounds, to both Models I and II. On conceptual grounds, Heckman's procedure is superior, but more costly to implement than Model I or II. In comparing predicted labor force participation rates with actual rates, Model II's Tobit prediction was the more accurate. 42 pp. Bibliog. (DGS)

This report is part of the RAND Corporation Report series. The report was a product of the RAND Corporation from 1948 to 1993 that represented the principal publication documenting and transmitting RAND's major research findings and final research.

Our mission to help improve policy and decisionmaking through research and analysis is enabled through our core values of quality and objectivity and our unwavering commitment to the highest level of integrity and ethical behavior. To help ensure our research and analysis are rigorous, objective, and nonpartisan, we subject our research publications to a robust and exacting quality-assurance process; avoid both the appearance and reality of financial and other conflicts of interest through staff training, project screening, and a policy of mandatory disclosure; and pursue transparency in our research engagements through our commitment to the open publication of our research findings and recommendations, disclosure of the source of funding of published research, and policies to ensure intellectual independence. For more information, visit www.rand.org/about/research-integrity.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.