Intertemporal Labor Force Participation of Married Women in Germany: A Panel Data Analysis

Enrica Croda (), Aikaterini Kyriazidou and Ioannis Polycarpou
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Enrica Croda: Department of Economics, University Of Venice C� Foscari
Ioannis Polycarpou: Athens University of Economics and Business

No 2011_17, Working Papers from Department of Economics, University of Venice "Ca' Foscari"

Abstract: This paper analyzes the intertemporal labor force participation behavior of married women using an annual longitudinal sample from the German Socio-Economic Panel. A predominant characteristic of annual participation behavior is the high degree of persistence in individual participation decisions. We use several model specifications to distinguish among the alternative explanations of this serial persistence: state dependence, individual unobserved heterogeneity, and serial correlation in the transitory error component. Similar to Hyslop (1999), we employ both dynamic �fixed effects� linear probability models as well as several static and dynamic probit models with �random effects� and serially correlated errors. In addition, we apply the estimators proposed by Honor� and Kyriazidou (2000) for dynamic �fixed effects� discrete choice models. We find strong state dependence, and substantial effects for fertility variables. Transitory and permanent non-labor income have in general small effects.

Keywords: State dependence; serial correlation; heterogeneity; panel data; intertemporal labor force participation; GSOEP. (search for similar items in EconPapers)
JEL-codes: C33 C36 J22 (search for similar items in EconPapers)
Pages: 24
Date: 2011-10
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