Lecture 11 - Lecture 11 Lecture 11 Household Production 1...

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ecture 11 Lecture 11 Household Production 1
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oadmap Roadmap tylized facts Stylized facts • Household production • Division of labor • Discouraged worker effect and Added worker effect. • Intertemporal labor supply. 2
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Weekly Hours Spent in Household Work, Paid Work, and Leisure Activities by Men and Women over Age yg 18, 2005 3
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abor- ousehold Choice Labor Household Choice We analyze this problem in a Similar way to the labor leisure choice. Income from spouse 4
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Labor Force Participation Rates and Full-Time Employment, Mothers of Young Children, by Age of py , g ,y g Child, 2006 5
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Correlation does not imply causation • If we find that in general, women who have more kids tend to work fewer hours, it could be due to…. – Women who like kids don’t like to work so they have more kids and work less. (spurious correlation) – Women who don’t work have a lower opportunity cost of having a child so they have more kids. (reverse causation). – We want to know kids cause women (or men) to work less. 6
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ool study Cool study • Angrist and Evans AER 1998 – The effect of having children on labor supply. • What do you think is the effect? it the same for men and women? • Is it the same for men and women? • Do you think the differences above are causal? – Why or why not? • Turns out that having two kids of the same gender redicts having another kid (having a first born girl predicts having another kid (having a first born girl predicts having another child outside the US). Also, having twins increases the number of kids you have beyond what you may have planned. 7
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ogic of study Logic of study • Women who have two boys (or two girls) as opposed to one oy and one girl are less likely to work boy and one girl are less likely to work. – There is no obvious reason why there should be any direct relationship between the gender mix of ones first two kids and working… right? • It turns out that families like variety so that families with two boys (or two girls) as opposed to one boy and one girl are more likely to have a third child. • The gender mix of the first two kids is random, so we know at there is no self- election or reverse causality. that there is no self selection or reverse causality. • As such, we think that we can use this to form a “causal” estimate. 8
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Example of logic • If having two boys (or two girls) increases the likelihood of having a third child by 20% (for reasons unrelated to reverse causality or self-selection), and having two boys (or two girls) increases decreases hours worked by 0.4 percent…. .
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This note was uploaded on 01/09/2010 for the course ILRLE 2400 at Cornell.

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Lecture 11 - Lecture 11 Lecture 11 Household Production 1...

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