Why are Well-Educated Women Not Full-Timers?

Abstract

A priori, one would expect that well educated women would choose to work fulltime to collect the returns to their investment in education. However, that is not the case. We analyze this phenomenon in a discrete choice dynamic programming framework, taking the potentially endogenous effect of work experience on annual earnings into account. We find that the main explanations are flat experience profiles and a high disutility of work. Policy simulations reveal that a moderate change in the return to experience or a moderate reduction in unemployment benefits would increase the proportion of full-timers substantially.