Divorce Risk, Wages, and Working Wives: A Quantitative Life-Cycle Analysis of Female Labor Force Participation

Raquel Fernandez and Joyce C. Wong

No 19869, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper develops a quantitative life-cycle model to study the increase in married women's labor force participation (LFP). We calibrate the model to match key life-cycle statistics for the 1935 cohort and use it to assess the changed environment faced by the 1955 cohort. We find that a higher divorce probability and changes in wage structure are each able to explain a large proportion of the LFP increase. Higher divorce risk increases LFP not because the latter contributes to higher marital assets or greater labor market experience, however. Instead, it is the result of conflicting spousal preferences towards the adjustment of marital consumption in the face of increased divorce risk.

JEL-codes: I3 J12 J13 J16 K36 (search for similar items in EconPapers)
Date: 2014-01
Note: EFG LS PE POL
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Citations: View citations in EconPapers (63)

Published as Raquel Fernández & Joyce Cheng Wong, 2014. "Divorce Risk, Wages and Working Wives: A Quantitative Life-Cycle Analysis of Female Labour Force Participation," The Economic Journal, vol 124(576), pages 319-358.

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