Changes in Married Women's Labor Supply Behavior in Germany, 1985-2005

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 28.10.2008, 12:15 - 13:30

   

Presentation by 

Monika Merz (University of Vienna)
   

Abstract:

In Germany, the amount of labor supplied by women in partnerships has undergone drasticchanges over the past two decades. Their employment ratio has steadily risen while Ė contraryto the trend observed in many Western industrialized countries Ė their weekly market hoursworked have significantly declined. This paper uses micro data from the German Socio-Economic Panel (SOEP) to study the link between changes in the wage structure and crosssectionalchanges in married womenís labor supply that have occurred in Germany since themid 1980s. Following the stratification method by Juhn and Murphy (1997), it links thechanges in wivesí labor market behavior to their partnerís wage rate and to familycircumstances, thereby documenting the heterogeneity in the incidence of hoursí reduction.The smallest decrease in weekly market hours occurred among high-skilled women andwomen with a high-wage partner; this pattern prevails even when young children are present.The evidence is consistent with results derived from estimating a simple household model ofwivesí market hours using Garenís (1984) control function approach. Wivesí market hoursreact positively to a rise in their own wage and negatively to a rise in their partnerís wage, orto small children in the family.

   
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