Family structure and female labor supply in Mexico City

Xiaodong Gong, Arthur van Soest

Research output: Contribution to journalArticlepeer-review

31 Citations (Scopus)


We investigate labor supply of married women in Mexico City, using a static neoclassical structural model. By choosing her labor supply and corresponding income, each woman is assumed to maximize a direct translog utility function with family composition variables as taste shifters. We account for random preferences, their correlation with wage equation errors, and fixed costs of working. The wage equation and the labor supply model are estimated jointly by smooth simulated maximum likelihood. We find income elasticities of labor supply of about - 0.17, and wage elasticities of about 0.87. The latter are underestimated if we ignore the correlation between wage equation errors and random preferences.

Original languageEnglish
Pages (from-to)163-191
Number of pages29
JournalJournal of Human Resources
Issue number1
Publication statusPublished - 2002
Externally publishedYes


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