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

Duo Qin, Sophie van Huellen and Qing-Chao Wang
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Qing-Chao Wang: Department of Economics, School of Oriental and African Studies (SOAS), University of London, Thornhaugh Street, Russell Square, London WC1H 0XG, UK

Econometrics, 2015, vol. 4, issue 1, 1-31

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.

Keywords: labour supply wage elasticity; instrumental variable; selection bias; parameter stability (search for similar items in EconPapers)
JEL-codes: B23 C C00 C01 C1 C2 C3 C4 C5 C8 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jecnmx:v:4:y:2015:i:1:p:1-:d:61313

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