Participation and wage equations for married women in European countries

Catia Nicodemo, Tor Vergata University

This paper estimates the participation and the wage equations for married women, in a framework of panel data sample selection using data from the European Community Household Panel (EHCP) corresponding to the wave 1994-2001, for thirteen European countries and explores the difference across-countries in a labor supply contest. There is a considerable variation in the degree of labor market participation rate of women across countries. The aim of this paper is to estimate the labor force participation equation for married females and explain how the variables such as personal and family characteristics, several source of income of the household and, in some countries, labor status of the husband influence on this equation and contribute to find fundamental differences across counties. We focus our attention on family benefits and family financial conditions. The woman’s labor participation increases with her potential wage and decreases when her non-labor income increases, so we explore the wage equation for females and which variables influence positively on this earn. We estimate the female wage equation in a framework of unbalanced panel data models with sample selection. The wage equations of females have several potential sources of bias so in this paper a panel data estimator, a test for selection bias and a correction procedure are used.