Panel Paper:
Household Earning and Female Labor Supply in India
Sunday, April 9, 2017
:
11:45 AM
HUB 269 (University of California, Riverside)
*Names in bold indicate Presenter
In India, despite economic growth, a decline in fertility, and an increase in female education, the
female labor force participation (FLFP) rate has declined. This paper analyzes one mechanism that
explains this puzzling change- non-labor household income of the spouse. I use data from 1999-2012
of the National Sample Survey to form a panel of districts in India segregated by skill levels of males.
I use this decade long panel to estimate the e ect of married male earnings in a district-skill group
on the labor supply of married females of that group. I supplement the analysis with the Indian
Human Development Survey individual panel to estimate the e ect of husband's earnings on wife's
labor supply. My analyses from both sources of variation in male earnings show a robust negative
e ect of married male earnings on the labor supply of married females in India. I find that a 10 per-
cent increase in male earnings reduces married women's labor force participation by approximately
0.6 percentage points. I do not find any e ect of married male earnings on the labor supply of
never-married females. I also find a negative e ect of married male household income on the labor
supply of the elderly and teenagers. These fndings are consistent with the framework described in
Goldin (1994) where economic development may result in declining FLFP during the initial phase
of economic development. Results in this paper contribute to the empirical evidence of the added
worker hypothesis in developing economies, and indicate a strong mechanism - income e ect- behind
the puzzling trend of FLFP in India.
female labor force participation (FLFP) rate has declined. This paper analyzes one mechanism that
explains this puzzling change- non-labor household income of the spouse. I use data from 1999-2012
of the National Sample Survey to form a panel of districts in India segregated by skill levels of males.
I use this decade long panel to estimate the e ect of married male earnings in a district-skill group
on the labor supply of married females of that group. I supplement the analysis with the Indian
Human Development Survey individual panel to estimate the e ect of husband's earnings on wife's
labor supply. My analyses from both sources of variation in male earnings show a robust negative
e ect of married male earnings on the labor supply of married females in India. I find that a 10 per-
cent increase in male earnings reduces married women's labor force participation by approximately
0.6 percentage points. I do not find any e ect of married male earnings on the labor supply of
never-married females. I also find a negative e ect of married male household income on the labor
supply of the elderly and teenagers. These fndings are consistent with the framework described in
Goldin (1994) where economic development may result in declining FLFP during the initial phase
of economic development. Results in this paper contribute to the empirical evidence of the added
worker hypothesis in developing economies, and indicate a strong mechanism - income e ect- behind
the puzzling trend of FLFP in India.
