Heterogeneity in Returns to Work Experience: A Dynamic Model of Female Labor Force Participation

Ken Yamada

No 10-2009, Working Papers from Singapore Management University, School of Economics

Abstract: This paper provides structural estimates of heterogeneous returns to work experience for Japanese married women. A dynamic model of labor force participation is used to account for dynamic selfselection into employment. Heterogeneity is incorporated into the model in a way that allows for the multidimensional skill heterogeneity in employment and home production and for the individual-specific slope and curvature of experience effect on earnings. The structural estimates and their comparison to the reduced-form estimates highlight the importance of dynamic self-selection into employment and heterogeneity in returns to work experience.

Date: 2008-04, Revised 2009-08
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Published in SMU Economics and Statistics Working Paper Series

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