[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/ecm/nawm04/334.html
   My bibliography  Save this paper

Joint estimation of sequential labor force participation and fertility decisions using Markov chain Monte Carlo techniques

Author

Listed:
  • Hielke Buddelmeyer
  • Kenneth Troske
Abstract
Three basic mechanisms are behind the statistical relationship between fertility decisions and labor force participation decisions. 1) Causal direct effect: the time spent in child-care reduces the labor market effort leading to a temporary drop in post-birth labor force participation. 2) Causal indirect effect: the time spent out of labor market while on maternity leave alters women’s participation experience and, thus, indirectly affect both pre- and post-birth participation behavior. In the post-birth period, the indirect effect will compound the direct effect. The sign of the indirect effect in the pre-birth period is ambiguous. 3) Unobserved heterogeneity: Differences in tastes for work and family structure may induce a correlation between participation and fertility decisions throughout lifetime. They may further induce differences in pre-market human capital investments and, thus, affect labor market outcomes. This paper proposes a model that disentangles these three mechanisms and evaluates their relative importance. Sequential participation and fertility decisions are jointly modeled. Participation decisions on a three-state space - employed full-time, employed part-time, not employed – and dichotomous fertility decisions are represented by a multivariate probit model with a general correlation structure. The model allows for a high degree of flexibility in modeling the correlation between labor force participation and fertility decisions and the dependence of sequential decisions. We estimate this model using data from the 1979 National Longitudinal Survey of Youth. The estimation is performed using Markov chain Monte Carlo methods.

Suggested Citation

  • Hielke Buddelmeyer & Kenneth Troske, 2004. "Joint estimation of sequential labor force participation and fertility decisions using Markov chain Monte Carlo techniques," Econometric Society 2004 North American Winter Meetings 334, Econometric Society.
    • Handle: RePEc:ecm:nawm04:334
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Rosenzweig, Mark R & Wolpin, Kenneth I, 1980. "Life-Cycle Labor Supply and Fertility: Causal Inferences from Household Models," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 328-348, April.
    2. Geweke, John, 1989. "Bayesian Inference in Econometric Models Using Monte Carlo Integration," Econometrica, Econometric Society, vol. 57(6), pages 1317-1339, November.
    3. David S. Loughran & Julie M. Zissimopoulos, 2009. "Why Wait?: The Effect of Marriage and Childbearing on the Wages of Men and Women," Journal of Human Resources, University of Wisconsin Press, vol. 44(2).
    4. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    5. Keane, Michael P, 1994. "A Computationally Practical Simulation Estimator for Panel Data," Econometrica, Econometric Society, vol. 62(1), pages 95-116, January.
    6. Jacob Mincer & Solomon Polachek, 1974. "Family Investments in Human Capital: Earnings of Women," NBER Chapters, in: Marriage, Family, Human Capital, and Fertility, pages 76-110, National Bureau of Economic Research, Inc.
    7. Daniel Aaronson, 1998. "Using Sibling Data to Estimate the Impact of Neighborhoods on Children's Educational Outcomes," Journal of Human Resources, University of Wisconsin Press, vol. 33(4), pages 915-946.
    8. Chamberlain, Gary, 1984. "Panel data," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 22, pages 1247-1318, Elsevier.
    9. Ondrich, Jan & Spiess, C Katharina & Yang, Qing, 1996. "Barefoot and in a German Kitchen: Federal Parental Leave and Benefit Policy and the Return to Work after Childbirth in Germany," Journal of Population Economics, Springer;European Society for Population Economics, vol. 9(3), pages 247-266, August.
    10. Arellano, Manuel & Honore, Bo, 2001. "Panel data models: some recent developments," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 53, pages 3229-3296, Elsevier.
    11. Jacob Mincer & Solomon Polachek, 1978. "An Exchange: The Theory of Human Capital and the Earnings of Women: Women's Earnings Reexamined," Journal of Human Resources, University of Wisconsin Press, vol. 13(1), pages 118-134.
    12. Pesaran, M. Hashem & Smith, Ron, 1995. "Estimating long-run relationships from dynamic heterogeneous panels," Journal of Econometrics, Elsevier, vol. 68(1), pages 79-113, July.
    13. Holtz-Eakin, Douglas & Newey, Whitney & Rosen, Harvey S, 1988. "Estimating Vector Autoregressions with Panel Data," Econometrica, Econometric Society, vol. 56(6), pages 1371-1395, November.
    14. Dean R. Hyslop, 1999. "State Dependence, Serial Correlation and Heterogeneity in Intertemporal Labor Force Participation of Married Women," Econometrica, Econometric Society, vol. 67(6), pages 1255-1294, November.
    15. John Geweke & Michael P. Keane, 1996. "Bayesian inference for dynamic choice models without the need for dynamic programming," Working Papers 564, Federal Reserve Bank of Minneapolis.
    16. Christopher J. Ruhm, 2004. "Parental Employment and Child Cognitive Development," Journal of Human Resources, University of Wisconsin Press, vol. 39(1).
    17. Francis Vella & Marno Verbeek, 1998. "Whose wages do unions raise? A dynamic model of unionism and wage rate determination for young men," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 13(2), pages 163-183.
    18. Voicu, Alexandru & Buddelmeyer, Hielke, 2003. "Children and Women's Participation Dynamics: Transitory and Long-Term Effects," IZA Discussion Papers 729, Institute of Labor Economics (IZA).
    19. Jacob Mincer, 1962. "Labor Force Participation of Married Women: A Study of Labor Supply," NBER Chapters, in: Aspects of Labor Economics, pages 63-105, National Bureau of Economic Research, Inc.
    20. Edward Vytlacil & James J. Heckman, 2001. "Policy-Relevant Treatment Effects," American Economic Review, American Economic Association, vol. 91(2), pages 107-111, May.
    21. Carrasco, Raquel, 2001. "Binary Choice with Binary Endogenous Regressors in Panel Data: Estimating the Effect of Fertility on Female Labor Participation," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(4), pages 385-394, October.
    22. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-475, March.
    23. Arellano, Manuel & Carrasco, Raquel, 2003. "Binary choice panel data models with predetermined variables," Journal of Econometrics, Elsevier, vol. 115(1), pages 125-157, July.
    24. Browning, Martin, 1992. "Children and Household Economic Behavior," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1434-1475, September.
    25. William Axinn & Marin Clarkberg & Arland Thornton, 1994. "Family influences on family size preferences," Demography, Springer;Population Association of America (PAA), vol. 31(1), pages 65-79, February.
    26. C. Russell Hill & Frank P. Stafford, 1980. "Parental Care of Children: Time Diary Estimates of Quantity, Predictability, and Variety," Journal of Human Resources, University of Wisconsin Press, vol. 15(2), pages 219-239.
    27. R. Haurin & Frank Mott, 1990. "Adolescent sexual activity in the family context: The impact of older siblings," Demography, Springer;Population Association of America (PAA), vol. 27(4), pages 537-557, November.
    28. Alice Nakamura & Masao Nakamura, 1994. "Predicting Female Labor Supply: Effects of Children and Recent Work Experience," Journal of Human Resources, University of Wisconsin Press, vol. 29(2), pages 304-327.
    29. Arellano, Manuel, 2003. "Panel Data Econometrics," OUP Catalogue, Oxford University Press, number 9780199245291.
    30. Angrist, Joshua D & Evans, William N, 1998. "Children and Their Parents' Labor Supply: Evidence from Exogenous Variation in Family Size," American Economic Review, American Economic Association, vol. 88(3), pages 450-477, June.
    31. Gianna Claudia Giannelli, 1996. "Women`s transitions in the labour market: A competing risks analysis on German panel data," Journal of Population Economics, Springer;European Society for Population Economics, vol. 9(3), pages 287-300.
    32. Rebecca M. Blank, 1994. "The Dynamics of Part-Time Work," NBER Working Papers 4911, National Bureau of Economic Research, Inc.
    33. Heckman, James J & Willis, Robert J, 1977. "A Beta-logistic Model for the Analysis of Sequential Labor Force Participation by Married Women," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 27-58, February.
    34. Balestra, Pietro & Negassi, Syoum, 1992. "A Random Coefficient Simultaneous Equation System with an Application to Direct Foreign Investment by French Firms," Empirical Economics, Springer, vol. 17(1), pages 205-220.
    35. 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.
    36. Duran Bell, 1974. "Why Participation Rates of Black and White Wives Differ," Journal of Human Resources, University of Wisconsin Press, vol. 9(4), pages 465-479.
    37. Arleen Leibowitz & Jacob Alex Klerman & Linda J. Waite, 1992. "Employment of New Mothers and Child Care Choice: Differences by Children's Age," Journal of Human Resources, University of Wisconsin Press, vol. 27(1), pages 112-133.
    38. Altonji, Joseph G. & Blank, Rebecca M., 1999. "Race and gender in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 48, pages 3143-3259, Elsevier.
    39. Reuben Gronau, 1974. "The Effect of Children on the Housewife's Value of Time," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 457-490, National Bureau of Economic Research, Inc.
    40. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    41. Chib, Siddhartha & Greenberg, Edward, 1995. "Hierarchical analysis of SUR models with extensions to correlated serial errors and time-varying parameter models," Journal of Econometrics, Elsevier, vol. 68(2), pages 339-360, August.
    42. Geweke, John F. & Keane, Michael P. & Runkle, David E., 1997. "Statistical inference in the multinomial multiperiod probit model," Journal of Econometrics, Elsevier, vol. 80(1), pages 125-165, September.
    43. Mortensen, Dale T., 1987. "Job search and labor market analysis," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 2, chapter 15, pages 849-919, Elsevier.
    44. Blank, Rebecca M, 1989. "The Role of Part-Time Work in Women's Labor Market Choices over Time," American Economic Review, American Economic Association, vol. 79(2), pages 295-299, May.
    45. McCulloch, Robert & Rossi, Peter E., 1994. "An exact likelihood analysis of the multinomial probit model," Journal of Econometrics, Elsevier, vol. 64(1-2), pages 207-240.
    46. Jane Waldfogel & Wen-Jui Han & Jeanne Brooks-Gunn, 2002. "The effects of early maternal employment on child cognitive development," Demography, Springer;Population Association of America (PAA), vol. 39(2), pages 369-392, May.
    47. Heckman, James J. & Robb, Richard Jr., 1985. "Alternative methods for evaluating the impact of interventions : An overview," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 239-267.
    48. Evelyn L. Lehrer, 1992. "The Impact of Children on Married Women's Labor Supply: Black-White Differentials Revisited," Journal of Human Resources, University of Wisconsin Press, vol. 27(3), pages 422-444.
    49. Folbre, Nancy, 1994. "Children as Public Goods," American Economic Review, American Economic Association, vol. 84(2), pages 86-90, May.
    50. Hsiao, Cheng & Appelbe, Trent W. & Dineen, Christopher R., 1993. "A general framework for panel data models with an application to Canadian customer-dialed long distance telephone service," Journal of Econometrics, Elsevier, vol. 59(1-2), pages 63-86, September.
    51. Bo E. Honoré & Ekaterini Kyriazidou, 2000. "Panel Data Discrete Choice Models with Lagged Dependent Variables," Econometrica, Econometric Society, vol. 68(4), pages 839-874, July.
    52. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    53. Bjorklund, Anders & Moffitt, Robert, 1987. "The Estimation of Wage Gains and Welfare Gains in Self-selection," The Review of Economics and Statistics, MIT Press, vol. 69(1), pages 42-49, February.
    54. Daniel Powers & James Cherng-Tay Hsueh, 1997. "Sibling models of socioeconomic effects on the timing of first premarital birth," Demography, Springer;Population Association of America (PAA), vol. 34(4), pages 493-511, November.
    55. Kelejian, Harry H, 1974. "Random Parameters in a Simultaneous Equation Framework: Identification and Estimation," Econometrica, Econometric Society, vol. 42(3), pages 517-527, May.
    56. David Shapiro & Frank L. Mott, 1994. "Long-Term Employment and Earnings of Women in Relation to Employment Behavior Surrounding the First Birth," Journal of Human Resources, University of Wisconsin Press, vol. 29(2), pages 248-275.
    57. Ronsen, Marit & Sundstrom, Marianne, 1996. "Maternal Employment in Scandinavia: A Comparison of the After-Birth Employment Activity of Norwegian and Swedish Women," Journal of Population Economics, Springer;European Society for Population Economics, vol. 9(3), pages 267-285, August.
    58. Mariano,Roberto & Schuermann,Til & Weeks,Melvyn J. (ed.), 2000. "Simulation-based Inference in Econometrics," Cambridge Books, Cambridge University Press, number 9780521591126, September.
    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. Quamrul H. Ashraf & David N. Weil & Joshua Wilde, 2013. "The Effect of Fertility Reduction on Economic Growth," Population and Development Review, The Population Council, Inc., vol. 39(1), pages 97-130, March.
    2. Sylvia Frühwirth-Schnatter & Christoph Pamminger & Andrea Weber & Rudolf Winter-Ebmer, 2016. "Mothers' long-run career patterns after first birth," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 179(3), pages 707-725, June.
    3. Michael Anyadike-Danes & Duncan McVicar, 2010. "My Brilliant Career: Characterizing the Early Labor Market Trajectories of British Women From Generation X," Sociological Methods & Research, , vol. 38(3), pages 482-512, February.
    4. Kazuaki Okamura & Nizamul Islam, 2021. "Effects of the timing of childbirth on female labor supply: an analysis using the sequential matching approach," Applied Economics, Taylor & Francis Journals, vol. 53(28), pages 3253-3266, June.
    5. Cameron, Lisa A. & Contreras Suarez, Diana & Tseng, Yi-Ping, 2023. "Women's Transitions in the Labour Market as a Result of Childbearing: The Challenges of Formal Sector Employment in Indonesia," IZA Discussion Papers 16136, Institute of Labor Economics (IZA).
    6. Xiaoyan Chen Youderian, 2014. "The motherhood wage penalty and non-working women," Economics Bulletin, AccessEcon, vol. 34(2), pages 757-765.
    7. Fitzenberger, Bernd & Sommerfeld, Katrin & Steffes, Susanne, 2013. "Causal effects on employment after first birth — A dynamic treatment approach," Labour Economics, Elsevier, vol. 25(C), pages 49-62.
    8. Daniel Fernández-Kranz & Marie Paul & Núria Rodríguez-Planas, 2015. "Part-Time Work, Fixed-Term Contracts, and the Returns to Experience," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 77(4), pages 512-541, August.
    9. Sophie-Charlotte Klose, 2020. "Identifying Latent Structures in Maternal Employment: Evidence on the German Parental Benefit Reform," Papers 2011.03541, arXiv.org.
    10. Paul, Marie & Fernandez-Kranz, Daniel & Rodriguez-Planas, Nuria, 2014. "The Wage Effects of Fixed-term Contract Employment Revisited: an Investigation Based on Social Security Records," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100324, Verein für Socialpolitik / German Economic Association.
    11. Kenneth Troske & Alexandru Voicu, 2013. "The effect of the timing and spacing of births on the level of labor market involvement of married women," Empirical Economics, Springer, vol. 45(1), pages 483-521, August.
    12. Elena Bardasi & Chiara Monfardini, 2004. "Women's Employment, Children and Transition: An Empirical Analysis on Poland," Eastward Enlargement of the Euro-zone Working Papers wp25, Free University Berlin, Jean Monnet Centre of Excellence, revised 15 Oct 2004.
    13. Peter Haan & Daniel Kemptner & Arne Uhlendorff, 2015. "Bayesian procedures as a numerical tool for the estimation of an intertemporal discrete choice model," Empirical Economics, Springer, vol. 49(3), pages 1123-1141, November.

    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. Troske, Kenneth & Voicu, Alexandru, 2009. "The Effect of Children on the Level of Labor Market Involvement of Married Women: What is the Role of Education?," IZA Discussion Papers 4074, Institute of Labor Economics (IZA).
    2. Kenneth Troske & Alexandru Voicu, 2013. "The effect of the timing and spacing of births on the level of labor market involvement of married women," Empirical Economics, Springer, vol. 45(1), pages 483-521, August.
    3. Geweke, J. & Joel Horowitz & Pesaran, M.H., 2006. "Econometrics: A Bird’s Eye View," Cambridge Working Papers in Economics 0655, Faculty of Economics, University of Cambridge.
    4. Arellano, Manuel & Carrasco, Raquel, 2003. "Binary choice panel data models with predetermined variables," Journal of Econometrics, Elsevier, vol. 115(1), pages 125-157, July.
    5. Fernández-Val, Iván & Vella, Francis, 2011. "Bias corrections for two-step fixed effects panel data estimators," Journal of Econometrics, Elsevier, vol. 163(2), pages 144-162, August.
    6. Tong Li & Xiaoyong Zheng, 2008. "Semiparametric Bayesian inference for dynamic Tobit panel data models with unobserved heterogeneity," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 23(6), pages 699-728.
    7. James J. Heckman, 2005. "Micro Data, Heterogeneity and the Evaluation of Public Policy Part 2," The American Economist, Sage Publications, vol. 49(1), pages 16-44, March.
    8. Pierre-Carl Michaud & Konstantinos Tatsiramos, 2005. "Employment Dynamics of Married Women in Europe," Working Papers WR-273, RAND Corporation.
    9. Hübler, Olaf, 2005. "Panel Data Econometrics: Modelling and Estimation," Hannover Economic Papers (HEP) dp-319, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    10. Manuel Arellano, 2003. "Discrete choices with panel data," Investigaciones Economicas, Fundación SEPI, vol. 27(3), pages 423-458, September.
    11. Julian P. Cristia, 2006. "The Effect of a First Child on Female Labor Supply: Evidence from Women Seeking Fertility Services: Working Paper 2006-11," Working Papers 18233, Congressional Budget Office.
    12. Prowse, Victoria L., 2005. "State Dependence in a Multi-State Model of Employment Dynamics," IZA Discussion Papers 1623, Institute of Labor Economics (IZA).
    13. Fernández-Val, Iván, 2009. "Fixed effects estimation of structural parameters and marginal effects in panel probit models," Journal of Econometrics, Elsevier, vol. 150(1), pages 71-85, May.
    14. Del Boca, Daniela & Sauer, Robert M., 2009. "Life cycle employment and fertility across institutional environments," European Economic Review, Elsevier, vol. 53(3), pages 274-292, April.
    15. Michaud, Pierre-Carl & Tatsiramos, Konstantinos, 2005. "Employment Dynamics of Married Women in Europe," IZA Discussion Papers 1706, Institute for the Study of Labor (IZA).
    16. Gayle, Wayne-Roy, 2013. "Identification and N-consistent estimation of a nonlinear panel data model with correlated unobserved effects," Journal of Econometrics, Elsevier, vol. 175(2), pages 71-83.
    17. Williams, Benjamin, 2020. "Nonparametric identification of discrete choice models with lagged dependent variables," Journal of Econometrics, Elsevier, vol. 215(1), pages 286-304.
    18. Kerem Tuzcuoglu, 2019. "Composite Likelihood Estimation of an Autoregressive Panel Probit Model with Random Effects," Staff Working Papers 19-16, Bank of Canada.
    19. Victoria Prowse, 2005. "State Dependence in a Multi-state Model of Employment," Economics Papers 2005-W20, Economics Group, Nuffield College, University of Oxford.
    20. Hoderlein, Stefan & White, Halbert, 2012. "Nonparametric identification in nonseparable panel data models with generalized fixed effects," Journal of Econometrics, Elsevier, vol. 168(2), pages 300-314.

    More about this item

    Keywords

    Fertility decisions; Labor force participation; Multivariate probit; markov chain monte carlo;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

    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:ecm:nawm04:334. 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: Christopher F. Baum (email available below). General contact details of provider: https://edirc.repec.org/data/essssea.html .

    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.