We analyse the dynamic labour participation behaviour of Korean women. State dependence under unobserved heterogeneity is considered, where the heterogeneity may be unrelated, pseudo-related, or arbitrarily related to regressors. Three minor methodological contributions are made: interaction terms with lagged response are allowed in dynamic conditional logit; a three-stage algorithm for dynamic probit is proposed; and treating the initial response as fixed is shown to be ill-advised. The state dependence is about 0.6 × SD(error), higher for the married or junior college-educated, and lower for women in their twenties and thirties. While education increases participation, college education has negative effects for women in their forties or above. Marriage has a high negative short-term effect but a positive long-term effect.
Asian Studies | Labor Economics
Oxford Bulletin of Economics and Statistics
LEE, Myoung-jae and TAE, Yoon-Hee.
Analysis of Labor Participation Behavior of Korean Women with Dynamic Probit and Conditional Logit. (2005). Oxford Bulletin of Economics and Statistics. 67, (1), 71-91. Research Collection School Of Economics.
Available at: http://ink.library.smu.edu.sg/soe_research/292
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