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  • Title: Lifetime models of female labor supply, wage rates, and fertility.
    Author: Carliner G, Robinson C, Tomes N.
    Journal: Res Popul Econ; 1984; 5():1-27. PubMed ID: 12266408.
    Abstract:
    A simple 1 period lifetime model is specified in which schooling is part of the lifetime period. This implies that an adding-up constraint is imposed on the uses of time in the lifetime including schooling, which may induce a negative correlation between years of schooling and years in the market, while producing a positive correlation between years of schooling and the fraction of the postschool lifetime spent in the market. The model is used to interpret empirical analyses based on alternative measures of lifetime labor supply and on alternative specifications of which variables may be treated as exogenous. In the empirical analysis the retrospective and longitudinal aspects of the newly available National Longitudinal Survey of Women is used to construct a measure of the fraction of the lifetime supplied to the market and measures of the lifetime wage rates of both the husband and the wife. The empirical results take the lifetime model of labor supply seriously in that the empirical measures of labor supply and wage rates bear a much closer resemblance to the theoretical concepts than measures typically employed in the literature. The estimates indicate that the "plausible assumptions" required for the true coefficient on fertility in a labor supply equation to be zero are fulfilled. These estimates are compared with those obtained using current measures as proxies for lifetime variables. Based on these estimates, an explanation is offered for the apparent contradiction between the findings of studies using a simultaneous equations approach that report no effect of fertility on female labor supply and the strong depressing effect of children on (current) labor supply obtained from research that treats children as exogenous. Current female hours appear more responsive to husbands' current earnings and female education than is the case with the lifetime variables. There are marked differences in the effects of race. The lifetime hours of white women are only some 2 1/2 years less than those of black women, whereas the current measure implies a difference of more than 8 years. Having a foreign nationality depresses the current measures by more than 5 years but has no significant effect over the lifetime. The crude proxy for nonlabor income, while only significant at the 10% level, depresses current labor supply more than it depresses the lifetime measure. Similarly, having a father with a college education reduces current labor supply but not lifetime hours. In the absence of a dynamic life cycle model nesting both the 1 period lifetime model and "current" period labor supply functions, it is not possible to provide a consistent explanation of the observed differences. Yet, the existence of these differences is sufficient to refute the notion that the lifetime quantities are distributed randomly across the "current periods."
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