Abstract
Race differences exist in the factors that influence the probability of participation by married women in low-income households. Given a relatively low average level of schooling among the women drawn from the low-income subsample, educational status is not a significant determinant, but experience is a significant positive determinant of the probability of participation among women of both races. The presence of preschool children has a significant, impeding effect on the probability of participation by white women, but is an insignificant factor for black women. Household financial status does not influence the probability of participation by married women from low-income households. Results from a Hausman test suggest that the influence of these variables should be accounted for in the fixed effect rather than as determinants of the demand for leisure.
One limitation of the fixed effects model is the assumption of time-invariance of the latent characteristics. Some determinants of labor supply may not remain constant over time, such as the marginal utility of initial wealth. Results from a life cycle model in a setting of uncertainty may provide richer estimates than those reported in this paper.
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