[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/11393.html
   My bibliography  Save this paper

Sources of Change in the Life-Cycle Decisions of American Men and Women: 1962-2014

Author

Listed:
  • Eckstein, Zvi
  • Keane, Michael
  • Lifshitz, Osnat
Abstract
We study life-cycle decisions of five cohorts of American men and women born from the 1930s to the 1970s in a unified econometric framework applied to CPS data. The men and women in our model make individual decisions when single, joint decisions when married, and interact in a marriage market. Our model succeeds in explaining differences across cohorts in several key endogenous variables (i.e., education, work, marriage/divorce and fertility). We explain these changes using shifts in five exogenous factors: parental education, the distribution of potential partners, divorce laws, the wage/job offer distribution, and birth control technology. A major change between the 1935 and 1975 cohorts is that the female “marriage wage premium†rose from -10% to +7%. We find that changes in the selection of women into marriage explain 75% of this change. Married women of recent cohorts have much higher observed and unobserved skills compared both to unmarried women and the married women of past cohorts.

Suggested Citation

  • Eckstein, Zvi & Keane, Michael & Lifshitz, Osnat, 2016. "Sources of Change in the Life-Cycle Decisions of American Men and Women: 1962-2014," CEPR Discussion Papers 11393, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:11393
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP11393
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Rust, John, 1987. "Optimal Replacement of GMC Bus Engines: An Empirical Model of Harold Zurcher," Econometrica, Econometric Society, vol. 55(5), pages 999-1033, September.
    2. Willis, Robert J & Rosen, Sherwin, 1979. "Education and Self-Selection," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 7-36, October.
    3. Claudia Goldin & Lawrence F. Katz & Ilyana Kuziemko, 2006. "The Homecoming of American College Women: The Reversal of the College Gender Gap," Journal of Economic Perspectives, American Economic Association, vol. 20(4), pages 133-156, Fall.
    4. Michael P. Keane & Kenneth I. Wolpin, 2010. "The Role Of Labor And Marriage Markets, Preference Heterogeneity, And The Welfare System In The Life Cycle Decisions Of Black, Hispanic, And White Women," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(3), pages 851-892, August.
    5. Larry E. JONES & Rodolfo E. MANUELLI & Ellen R. McGRATTAN, 2015. "Why Are Married Women Working so much ?," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 81(1), pages 75-114, March.
    6. Keane, Michael & Moffitt, Robert, 1998. "A Structural Model of Multiple Welfare Program Participation and Labor Supply," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(3), pages 553-589, August.
    7. Matthew Johnson & Michael P. Keane, 2013. "A Dynamic Equilibrium Model of the US Wage Structure, 1968-1996," Journal of Labor Economics, University of Chicago Press, vol. 31(1), pages 1-49.
    8. Orazio Attanasio & Hamish Low & Virginia Sánchez-Marcos, 2008. "Explaining Changes in Female Labor Supply in a Life-Cycle Model," American Economic Review, American Economic Association, vol. 98(4), pages 1517-1552, September.
    9. Raquel Fernandez, 2007. "Culture as Learning: The Evolution of Female Labor Force Participation over a Century," NBER Working Papers 13373, National Bureau of Economic Research, Inc.
    10. McFadden, Daniel, 1989. "A Method of Simulated Moments for Estimation of Discrete Response Models without Numerical Integration," Econometrica, Econometric Society, vol. 57(5), pages 995-1026, September.
    11. Jeremy Greenwood & Ananth Seshadri & Mehmet Yorukoglu, 2005. "Engines of Liberation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(1), pages 109-133.
    12. Alessandra Voena, 2015. "Yours, Mine, and Ours: Do Divorce Laws Affect the Intertemporal Behavior of Married Couples?," American Economic Review, American Economic Association, vol. 105(8), pages 2295-2332, August.
    13. Claudia Goldin & Lawrence F. Katz, 2002. "The Power of the Pill: Oral Contraceptives and Women's Career and Marriage Decisions," Journal of Political Economy, University of Chicago Press, vol. 110(4), pages 730-770, August.
    14. Apps,Patricia & Rees,Ray, 2009. "Public Economics and the Household," Cambridge Books, Cambridge University Press, number 9780521716284, September.
    15. Betsey Stevenson, 2008. "Divorce Law and Women's Labor Supply," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 5(4), pages 853-873, December.
    16. Maurizio Mazzocco, 2007. "Household Intertemporal Behaviour: A Collective Characterization and a Test of Commitment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(3), pages 857-895.
    17. Geweke, John & Keane, Michael, 2001. "Computationally intensive methods for integration in econometrics," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 56, pages 3463-3568, Elsevier.
    18. repec:hal:spmain:info:hdl:2441/eu4vqp9ompqllr09j00420pk7 is not listed on IDEAS
    19. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 63-90, January.
    20. Becker, Gary S, 1974. "A Theory of Marriage: Part II," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 11-26, Part II, .
    21. Stefania Albanesi & Claudia Olivetti, 2009. "Production, Market Production and the Gender Wage Gap: Incentives and Expectations," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 80-107, January.
    22. Gary S. Becker, 1974. "A Theory of Marriage," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 299-351, National Bureau of Economic Research, Inc.
    23. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-467, June.
    24. Fernández, Raquel, 2007. "Culture as Learning: The Evolution of Female Labour Force Participation Over a Century," CEPR Discussion Papers 6451, C.E.P.R. Discussion Papers.
    25. Donghoon Lee & Kenneth I. Wolpin, 2006. "Intersectoral Labor Mobility and the Growth of the Service Sector," Econometrica, Econometric Society, vol. 74(1), pages 1-46, January.
    26. Casey B. Mulligan & Yona Rubinstein, 2008. "Selection, Investment, and Women's Relative Wages Over Time," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(3), pages 1061-1110.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Borella, Margherita & De Nardi, Mariacristina & Yang, Fang, 2018. "The aggregate implications of gender and marriage," The Journal of the Economics of Ageing, Elsevier, vol. 11(C), pages 6-26.
    2. Jeremy Greenwood & Nezih Guner & Guillaume Vandenbroucke, 2017. "Family Economics Writ Large," Journal of Economic Literature, American Economic Association, vol. 55(4), pages 1346-1434, December.
    3. Andrés Erosa & Luisa Fuster & Gueorgui Kambourov & Richard Rogerson, 2022. "Hours, Occupations, and Gender Differences in Labor Market Outcomes," American Economic Journal: Macroeconomics, American Economic Association, vol. 14(3), pages 543-590, July.
    4. Margherita Borella & Mariacristina De Nardi & Fang Yang, 2023. "Are Marriage-Related Taxes and Social Security Benefits Holding Back Female Labour Supply?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 90(1), pages 102-131.
    5. Hassani Nezhad, Lena, 2020. "Female Employment and Childcare," IZA Discussion Papers 13839, Institute of Labor Economics (IZA).
    6. Margherita Borella & Mariacristina De Nardi & Fang Yang, 2017. "Marriage-related Policies in an Estimated Life-cycle Model of Households’ Labor Supply and Savings for Two Cohorts," Working Papers wp371, University of Michigan, Michigan Retirement Research Center.
    7. Stefania Albanesi & Maria Jose Prados, 2022. "Slowing Women’s Labor Force Participation: The Role of Income Inequality," Working Papers 2022-037, Human Capital and Economic Opportunity Working Group.
    8. Margherita Borella & Mariacristina De Nardi & Fang Yang, 2017. "The Effects of Marriage-Related Taxes and Social Security Benefits," NBER Working Papers 23972, National Bureau of Economic Research, Inc.
    9. Jeremy Greenwood & Nezih Guner & Guillaume Vandenbroucke, 2017. "Family Economics Writ Large," Working Papers wp2018_1706, CEMFI.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rania Gihleb & Osnat Lifshitz, 2022. "Dynamic Effects of Educational Assortative Mating on Labor Supply," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 46, pages 302-327, October.
    2. Zvi Eckstein & Osnat Lifshitz, 2011. "Dynamic Female Labor Supply," Econometrica, Econometric Society, vol. 79(6), pages 1675-1726, November.
    3. Fernández, Raquel & Wong, Joyce Cheng, 2011. "The Disappearing Gender Gap: The Impact of Divorce, Wages, and Preferences on Education Choices and Women's Work," IZA Discussion Papers 6046, Institute of Labor Economics (IZA).
    4. Zvi Eckstein & Osnat Lifshitz, 2015. "Household Interaction And The Labor Supply Of Married Women," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56(2), pages 427-455, May.
    5. Eckstein, Zvi & Keane, Michael P. & Lifshitz, Osnat, 2023. "What Explains the Growing Gender Education Gap? The Effects of Parental Background, the Labor Market and the Marriage Market on College Attainment," IZA Discussion Papers 16612, Institute of Labor Economics (IZA).
    6. Raquel Fernández & Joyce Cheng Wong, 2011. "The Disappearing Gender Gap: The Impact of Divorce, Wages, and Preferences on Education Choices and Women's Work," NBER Working Papers 17508, National Bureau of Economic Research, Inc.
    7. Joyce Wong & Raquel Fernández, 2012. "The Disappearing Gender Gap: The impact of divorce, wages, and preferences on education and women's work," 2012 Meeting Papers 176, Society for Economic Dynamics.
    8. Doepke, M. & Tertilt, M., 2016. "Families in Macroeconomics," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 1789-1891, Elsevier.
    9. Suqin Ge & Fang Yang, 2013. "Accounting For The Gender Gap In College Attainment," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 478-499, January.
    10. Fernández, Raquel & Wong, Joyce Cheng, 2011. "The Disappearing Gender Gap: The Impact of Divorce, Wages, and Preferences on Education Choices and Women's Work," CEPR Discussion Papers 8627, C.E.P.R. Discussion Papers.
    11. Sebastian Galiani & Juan Pantano, 2021. "Structural Models: Inception and Frontier," NBER Working Papers 28698, National Bureau of Economic Research, Inc.
    12. Alberto Alesina & Andrea Ichino & Loukas Karabarbounis, 2011. "Gender-Based Taxation and the Division of Family Chores," American Economic Journal: Economic Policy, American Economic Association, vol. 3(2), pages 1-40, May.
    13. Hassani Nezhad, Lena, 2020. "Female Employment and Childcare," IZA Discussion Papers 13839, Institute of Labor Economics (IZA).
    14. Keane, Michael P. & Todd, Petra E. & Wolpin, Kenneth I., 2011. "The Structural Estimation of Behavioral Models: Discrete Choice Dynamic Programming Methods and Applications," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 4, pages 331-461, Elsevier.
    15. Bredemeier, Christian & Juessen, Falko, 2012. "Minimum Wages and Female Labor Supply in Germany," IZA Discussion Papers 6892, Institute of Labor Economics (IZA).
    16. Hamish Low & Costas Meghir & Luigi Pistaferri & Alessandra Voena, 2018. "Marriage, Labor Supply and the Dynamics of the Social Safety Net," NBER Working Papers 24356, National Bureau of Economic Research, Inc.
    17. Levin, Mark (Левин, Марк) & Matrosova, Ksenia (Матросова, Ксения), 2018. "Development and Research of Economic Behavior of Households in Changing Conditions [Разработка И Исследование Экономического Поведения Домохозяйств В Изменяющихся Условиях]," Working Papers 041825, Russian Presidential Academy of National Economy and Public Administration.
    18. Alessandra Fogli & Laura Veldkamp, 2011. "Nature or Nurture? Learning and the Geography of Female Labor Force Participation," Econometrica, Econometric Society, vol. 79(4), pages 1103-1138, July.
    19. THELOUDIS Alexandros, 2018. "Wages and Family Time Allocation," LISER Working Paper Series 2018-06, Luxembourg Institute of Socio-Economic Research (LISER).
    20. Klein, Matthew J. & Barham, Bradford L., 2018. "Point Estimates of Household Bargaining Power Using Outside Options," Staff Paper Series 590, University of Wisconsin, Agricultural and Applied Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:11393. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.