Labor Force Participation Behavior Research Articles

The Effect of Higher Education on the Rate of Labor-Force Exit for Married Japanese Women

This study investigates the impact of higher education on the rates of married Japanese women leaving the labor force. The data is drawn from interviews with 819 mothers of fourth and fifth grade students who participated in the School District Survey conducted in Central Japan. The subsample used for the analyses consists of 587 currently married women between the ages of 30 and 49 who have at least one child. Discrete-time logit models were used to estimate the effects of education on the risk of labor-force exit as defined by labor-force withdrawal lasting one year or longer. The controlling variables include women's wages, firm size/type, work status, and the husband's education, firm size/type, and income. The results show that in the early stages of career development, university graduates have a higher probability of leaving the labor force. In the later stages, however, university graduates are more likely to stay in the labor force. Marital status and parental status do not affect the employment decisions of university graduates as strongly as they affect those of high-school graduates. The occupational profiles of the highly educated stayers are represented by the teaching profession and civil servants, indicating that the change in the patterns of Japanese female labor-force participation behavior is still limited to a small number of occupations.

Fast Development With a Stable Income Distribution: Taiwan, 1979–94

This paper studies the mechanisms underlying the apparent stability of the income distribution in Taiwan. An original decomposition method based on micro‐simulation techniques is proposed. Applied to the distribution of income in Taiwan since 1979, it permits isolating the respective impact of changes in: (a) the earning structure; (b) labor‐force participation behavior; and (c) the socio‐demographic structure of the population. The stability of the distribution in Taiwan appears as the result of various structural forces which happened to offset each other. The small drop observed in the inequality of individual earnings resulted from the combination of unequalizing changes in the wage structure and the effects of changes in female labor‐force participation as well as in the educational structure of the population. However, the same offsetting forces, together with changes in the composition of households, resulted in a small increase in the inequality of the distribution of equivalized household income.

Labour Participation of Higher Education Students

The aim of this article is to shed light on the determinants of the decision to participate in the labour force while studying, and of the intensity of this participation as measured by the wages earned by students. We show that students react to their future expected economic benefits associated with their chosen course of study. In this sense, our results confirm Levy-Garboua’s (Revue francaise de Sociologie XVII: 53–80, 1976) thesis of working as an adjustment variable for the variations in the expected rate of return of discipline. Our results indicate that the decision to work while studying and its intensity depend on students’ socioeconomic status and material needs, as well as external financial resources. Altogether, our results suggest that the equity and internal efficiency implications of such a social bias in the labour force participation behaviour might not be too important, but that some public interventions might nevertheless improve the overall external efficiency by allowing students to spend more time on more valorizing activities rather than unskilled and low-paid jobs.

State Dependence, Serial Correlation and Heterogeneity in Intertemporal Labor Force Participation of Married Women

A dynamic search framework is developed to analyze the intertemporal labor force participation behavior of married women, using longitudinal data to allow for a rich dynamic structure. The sensitivity to alternative distributional assumptions is evaluated using linear probability and probit models. The dynamic probit models are estimated using maximum simulated likelihood (MSL) estimation, to overcome the computational difficulties inherent in maximum likelihood estimation of models with nontrivial error structures. The results find that participation decisions are characterized by significant state dependence, unobserved heterogeneity, and negative serial correlation in the error component. The hypothesis that fertility decisions are exogenous to women's participation decisions is rejected when dynamics are ignored; however, there is no evidence against this hypothesis in dynamic model specifications. Women's participation response is stronger to permanent than current nonlabor income, reflecting unobserved taste factors.

Child Care Costs as a Barrier to Employment for Single and Married Mothers

Because women typically serve as primary care providers for their children, female labor force participation behavior is likely to be affected significantly by the costs associated with replacing maternal care with nonmaternal care. While some evidence of this phenomenon exists in the economics literature, discrepancies across studies make it difficult to provide conclusive evidence of the employment effects of these child care costs. This paper uses an improved SIPP survey design to present new evidence regarding the degree to which child care prices impede mothers' employment behavior, with additional evidence of the difference in these elasticities across marital status, empirical technique, and equation specification. This permits linking this paper to the existing evidence, drawing the conclusion that child care prices impede mothers' employment behavior significantly, with single mothers exhibiting less responsiveness in their labor force participation behavior to child care price changes than married mothers. Generally, these results support the basic finding of Ribar (1992), reject the smaller price of care elasticities found by Averett et al. (1997), Blau and Robins (1988), Connelly (1992), and Tolin (1992), but replicate the lower elasticities found in these papers by changing equation specifications. Also, significant sensitivity in the price elasticity is revealed, particularly with respect to changes in equation specification.

L'impact des incitations financières au travail sur les comportements individuels : une estimation pour le cas français

Impact of Financial Incentives to Work on Individual Behaviour: An Estimation for France by Thomas Piketty Does making low-paid jobs more financially attractive for the jobless have a significant positive impact on employment levels in France? Various reforms introduced in France's social transfers system between 1982 and 1996 have changed the financial incentives to work for various categories of population, depending on the number of dependent children, family structure and other factors. We use individual data from the INSEE employment surveys conducted from 1982 to 1997 (involving some 150,000 observations each year) to see if the new incentives introduced by these reforms, such as the income support benefit (RMI) and first job allowance (APE), have led to adjustments in the differential employment levels of these various population groups, all other (observable) things being equal. This methodology has recently been used for the American Earned Income Tax Credit (EITC) Survey and in natural experiments in Canada. In principle, it enables us to make an unbiased estimate of the elasticity of labour force participation and job-seeking behaviour in relation to financial incentives. The findings suggest that elasticity is relatively greater for women (with or without dependent children). On the other hand, the data used do not enable us to show any significant effect of financial incentives to work on men's transition from non-employment to employment.

The pension incentive to retire: empirical evidence for West Germany.

"In this paper, the impact of the West German pension system on the retirement decisions of elderly citizens is analyzed within the framework of a discrete-time hazard rate model deduced from a micro-economic decision rule. The model is estimated using a panel dataset of elderly West German citizens. In order to improve the precision of the estimates obtained, the data from the sample are combined with aggregate-level information on the labour force participation behaviour of the elderly. Policy simulations based on the estimates reveal that the probability of early retirement can be reduced significantly by appropriate changes in the pension system."

A New Idea for Welfare Reform

This article analyzes several proposals to build work incentives into the U.S. welfare system. It concludes that the most cost effective way to do that is to offer a work subsidy to all low-income single parents—in other words, to simply pay them for working in the labor market. This conclusion is based on a model of the labor force participation behavior of low-income single mothers that the author developed with Robert Moffitt. Among the proposals evaluated in the article, besides the work subsidy, are proposals to reduce the rate that welfare benefits are reduced when welfare recipients work, to provide wage subsidies to low-wage workers, to expand the earned income tax credit, and to subsidize the fixed costs of working.

Mothers' Human Capital and Childcare in Britain

Childcare may affect the earnings of mothers, not just by enabling them to take employment while using it, but also by conserving human capital and increasing earnings at later stages of the mother's life. This paper simulates the lifetime earnings of a 'typical' British mother under a variety of childcare regimes. Childcare which continues into the years of schooling is particularly valuable. For a woman who changes her labour force participation behaviour as a result of the availability of childcare, the resources generated are shown to exceed the resource costs of the childcare, and the revenue gain to the exchequer may exceed the costs of 100 per cent subsidy.

Racial Differences in Married Female Labor Force Participation Behavior: An Analysis Using Interracial Marriages

Based on data from the 1980 census, three major findings emerge from this study. First, the labor force participation rate is higher for women in black-white interracial marriages than women in endogamous marriages. Second, the labor force participation rate of wives in interracial marriages, after adjusting for differences in observed personal characteristics, is approximately halfway between that of women in white homogeneous and black homogeneous marriages. Third, interracial marriages are more likely among women who are younger, Hispanic, foreign-born, more educated, previously married, and reside in the West.

Job Characteristics and the Labor Force Participation Behavior of Black and White Male Youth

Previous work regarding the labor force participation of black and white youth has ignored the fact that they may face jobs with different characteristics, such as socioeconomic status or degree of danger. This article examines the effects that such characteristics have on the probability of participation for a sample of black and white males from the National Longitudinal Survey Youth Cohort. The results suggest that some job characteristics have a significant impact on participation, particularly socioeconomic status. The estimates presented here suggest, however, that racial differences in socioeconomic status probably explain only a small portion of the black-white male youth participation rate differential.

The Labor Force Participation Behavior of Married Women under Conditions of Constraints on Borrowing

This paper investigates the effect of a borrowing constraint on the labor force participation of married women. The model developed here relaxes the assumption of perfect markets found in standard life-cycle models. We find evidence that married women's work in the market is positively related to the existence and extent of family borrowing restrictions. We suggest that the failure to account for this constant in family borrowing may be the reason for the unexpected positive sign in most empirical studies of the effect of family assets on a wife's work.

An analysis of trends in female labor force participation in Japan.

This paper reviews statistical data on Japan's female labor force participation and household behavior, and estimates income and wage elasticities from female labor supply equations. Labor force participation rates reveal that: 1) 1/4 of working women work part time, 2) the unemployment rate for women has been consistently lower that for men, 3) female wage rates have improved substantially relative to male wage rates from 1960 to 1975, 4) the educational attainment of the female labor force has increased remarkably, while the proportion of female workers having only an elementary level education declined from 60% to 43%, 5) the fertility rate of Japanese women has declined greatly during the postwar period (from 133 to 71 in 3 decades), and 6) there is a mild tendency to later marriage, and an increased tendency to divorce. A review of the data on female labor supply and household behavior shows that: an analysis of aggregate data is misleading since it includes heterogeneous groups of the self employed, unpaid family workers, and paid employees, whose behaviors are quite different, and 2) historical developments do not seem to conform with the logical sequence of events anticipated by human capital theory. Absolute values of wage elasticity are consistently smaller than income elasticity, both for time series and cross sectional analyses. The relative smallness of wage elasticity to income elasticity is confirmed for the cross sectional data, and may be the consequence of labor supply decisions that are not really responsive to female wage rates. The underestimation of cross sectional analysis has been common among previous studies; analysis is unable to avoid this problem because shifts over time are indicative of structural changes in the behavior of Japanese wives.

The success and failure in the Finnish labor market of different demographic groups

Data on flows between employment unemployment and not in the labor force states are unavailable for Finland but some insights may be gained by the indirect and more traditional methods used in this paper. As these methods are not substitutes for analyses of flow data the papers results should be interpreted as suggestive. The paper introduces and estimates a simple model of both employment and labor force participation behavior of different demographic groups. The focus is on differences between the groups in the simultaneous cyclical fluctuations in these 2 variables and the pattern of unemployment variation of age-sex groups which arises from differences in participation and employment is examined. The paper utilizes the same apparatus to scrutinize long-run changes in the levels of age-specific unemployment rates discussing the impact of the institutional change brought about by the 1972 Employment Law. This exercise indicates that taking into account both employment and labor force participation variations is essential in order to understand the short-run cyclical movements in unemployment in the Finnish labor market as well as secular changes in unemployment that have occurred during the last 2 decades. Groups with higher than average unemployment rates respond to an increase in available jobs by increasing their participation thereby giving rise to the impression that it is very difficult to reduce their unemployment rates. This is expecially the case with teenagers and the old. Prior to 1972 females of nearly all ages belonged to the category displaying substantial fluctuations in participation but this no longer holds true from 1972. This is consistent with a reduced discouragement of women when demand slackens. It appears that the extension of the unemployment assistance system of 1972 may have reinforced the tendency towards a higher degree of permanency in female labor force attachment and that the extension did not only contribute to an increase in unemployment but also to an even greater increase in participation and consequently to an increase in employment as well. Too little is known about the interaction of other factors to make strong claims about which is (are) the causa causans of the simultaneous increase in employment and unemployment. Yet this suggests that the unemployment figures between the period before and after 1972 are not directly comparable or stated differently that the remarkable increase in the overall unemployment rate during the 1970s is due in part to the fact that some of the earlier hidden unemployment has become measurable. Also it is necessary to recognize that the reduced cyclical variation in participation of adult females may reflect changes in the composition of the female labor force. They are more educated and hold jobs requiring more skilled labor and permanent attachment to the labor market.