Family Structure and Female Labour Supply in Mexico City

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Abstract

This paper investigates labour supply of the wives of the heads of households in Mexico City, with a focus on the impact of family structure. A static neoclassical structural model is used. We assume that each woman chooses her labour supply and corresponding income so that her utility is maximized, conditional upon her husband’s labour supply and earnings. We use a direct translog specification, and include family composition variables as taste shifters. Also taken into account are fixed costs of working, nonlinear taxes, unobserved preference variation, prediction errors in wages of nonworkers, and potential endogeneity of wages. The models are estimated by smooth simulated maximum likelihood using data from Mexico’s Urban Employment Survey drawn in 1992. We find income elasticities of labour supply of about -0.35, and wage elasticities of about 0.5. The latter is substantially overestimated if wage rate endogeneity is not taken into account. The results are robust with respect to other specification choices. We find that the impact of family structure variables on participation is different from that on hours worked, so that their total effect is ambiguous.
Original languageEnglish
Place of PublicationTilburg
PublisherEconometrics
Number of pages32
Volume1997-114
Publication statusPublished - 1997

Publication series

NameCentER Discussion Paper
Volume1997-114

Fingerprint

Family structure
Labor supply
Female labor supply
Mexico
Wages
Endogeneity
Participation
Tax
Wage elasticity
Structural model
Wage rate
Income
Income elasticity
Household
Simulated maximum likelihood
Fixed costs
Hours worked
Translog
Prediction error

Keywords

  • Female labour supply
  • family structure
  • discrete regression

Cite this

Gong, X., & van Soest, A. H. O. (1997). Family Structure and Female Labour Supply in Mexico City. (CentER Discussion Paper; Vol. 1997-114). Tilburg: Econometrics.
Gong, X. ; van Soest, A.H.O. / Family Structure and Female Labour Supply in Mexico City. Tilburg : Econometrics, 1997. (CentER Discussion Paper).
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Gong, X & van Soest, AHO 1997 'Family Structure and Female Labour Supply in Mexico City' CentER Discussion Paper, vol. 1997-114, Econometrics, Tilburg.

Family Structure and Female Labour Supply in Mexico City. / Gong, X.; van Soest, A.H.O.

Tilburg : Econometrics, 1997. (CentER Discussion Paper; Vol. 1997-114).

Research output: Working paperDiscussion paperOther research output

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Gong X, van Soest AHO. Family Structure and Female Labour Supply in Mexico City. Tilburg: Econometrics. 1997. (CentER Discussion Paper).