Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/34006 
Year of Publication: 
2006
Series/Report no.: 
IZA Discussion Papers No. 2332
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
Two key issues in the literature on female labor supply are: (1) if persistence in employment status is due to unobserved heterogeneity or state dependence, and (2) if fertility is exogenous to labor supply. Until recently, the consensus was that unobserved heterogeneity is very important, and fertility is endogenous. But Hyslop (1999) challenged this. Using a dynamic panel probit model of female labor supply including heterogeneity and state dependence, he found that adding autoregressive errors led to a substantial diminution in the importance of heterogeneity. This, in turn, meant he could not reject that fertility is exogenous. Here, we extend Hyslop (1999) to allow classification error in employment status, using an estimation procedure developed by Keane and Wolpin (2001) and Keane and Sauer (2005). We find that a fairly small amount of classification error is enough to overturn Hyslop's conclusions, leading to overwhelming rejection of the hypothesis of exogenous fertility.
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
390.08 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.