Married Females Labor Supply and the Effect of Couple's Education Gap

Abstract

Using March CPS data, we investigate married women's labor supply behavior from 1965 to 2011. We find that the female's relative position in education within the household is an important determinant in the decision to undertake employment, even after accounting for husband's wage. These findings hold up under all the alternative specifications controlling for: husband's education as a long run determinant of the level of permanent income; presence of young children; husband's unemployment risk; as well as the divorce risk. We then develop a dynamic model with the attempt to capture the empirical features of labor supply (coming soon!).