The Effect of Expected Changes in Marital Status on Labor Supply Decisions of Women and Men

Abstract

The Panel Study of Income Dynamics is uscd to estimale the effect of the expectation of future marital status change on labor supply decisions of men and women. The longitudinal data is uscd to estimate the probability of future marital status change conditional on current marital status. Labor supply is modeled as dependent on the individual's expectation of future marital status change. Individuals are assumed to assess the quality of thcir marriage if currently married or the quality of their relationship if currently divorced, and make labor supply decisions incorporating the expectation about future marital status change as a determinant. The empirical results suggest that labor supply decisions for both womcn and men depend on expectations of hture marital status changc.

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