Till mess do us part: Married women's market hours, home production, and divorce
Eva Garcia-Moran (joint with Zoe Kuehn)
In our paper we aim to highlight the importance of modelling household structures endogenously when considering labor market outcomes of married women. We explore the empirical evidence for a trade-off between higher future wages and higher probability of divorce for married women using micro data for Germany, finding that wives' market hours (hours dedicated to housework and child care) are positively (negatively) related to divorce. We then propose a dynamic life-cycle model of female labor force participation, home production, and endogenous divorce risk. We calibrate our model to German data to quantitatively assess the importance of modeling divorce endogenously to account for married women's market hours. Making divorce exogenous or ruling out divorce leads to an over estimation of married women's market hours. We carry out two policy experiments (subsidizing expenditure on home goods and reducing tax progressivity) to show the effects of different policies on married women's market hours and divorce.
The IHS seminar will take place online as an MS-Teams event. Interested parties can register by mail to event(at)ihs.ac.at and will receive a link to participate.
Eva Garcia-Moran is currently working as researcher in the group “European Governance and Public Finance” at IHS. She is a macroeconomist with a special focus on labor economics, family economics and quantitative methods