Does Spousal Labor Smooth Fluctuations in Husbands’ Earnings? The Role of Liquidity Constraints / Mercedes Garcia-Escribano.

Format:

Book

Government document

Author/Creator:

Garcia-Escribano, Mercedes.

Series:

IMF Working Papers; Working Paper ; No. 2004/020

IMF Working Papers

Language:

English

Subjects (All):

Married women--Employment--Economic aspects--Econometric models.

Married women.

Women--Employment--Economic aspects--Econometric models.

Women.

Liquidity (Economics)--Econometric models.

Liquidity (Economics).

Physical Description:

1 online resource (43 p.)

Place of Publication:

Washington, D.C. : International Monetary Fund, 2004.

Language Note:

English

Summary:

This paper theoretically and empirically investigates the role of spousal labor in buffering transitory shocks to husbands' earnings. To measure the amount of the shock that spousal labor absorbs, an instrumented cross-sectional variance decomposition is developed. Using data from the Panel Study of Income Dynamics, the paper finds that the smoothing resulting from the wives' labor response (both labor force participation and hours of work) is larger for households with limited access to credit. This finding, which is consistent with the model's prediction, indicates that because of the presence of liquidity constraints, the temporal change in family income (exclusive of wives' earnings) reinforces the substitution effect in explaining the effect of shocks to the husbands' earnings on spousal labor.

Contents:

""Contents""; ""I. INTRODUCTION""; ""II. ADDED WORKER EFFECT LITERATURE""; ""III. THE MODEL""; ""A. The Setup""; ""B. Policy Functions""; ""C. Parameterization and Numerical Computation of the Model Solution""; ""IV. SMOOTHING MEASUREMENT FRAMEWORK""; ""V. EMPIRICAL SECTION""; ""A. Data""; ""B. Cross-Sectional Covariance Decomposition""; ""VI. EMPIRICAL RESULTS""; ""A. Estimates of the Smoothing Role of the Wife�s Labor�Full Sample""; ""B. The Effect of Credit Accessibility on the Smoothing Role of the Wife�s Labor""; ""VII. ROBUSTNESS AND EXTENSIONS""

""A. Robustness to Income Transfers""""B. Robustness: Downward Versus Upward Shock""; ""C. Robustness: Alternative Definition of Downward and Upward Shocks""; ""D. Implications""; ""VIII. CONCLUSION""; ""SAMPLE SELECTION""; ""REFERENCES""

Notes:

Description based upon print version of record.

Includes bibliographical references.

Description based on online resource; title from PDF cover (ebrary, viewed June 27, 2015).

ISBN:

9786613776761

9781462306695

1462306691

9781452711959

145271195X

9781281155405

1281155403

9781451891683

1451891687