The Relationship between Remarriage and Female Labor Supply

Alison Aughinbaugh, U.S. Bureau of Labor and Statistics (BLS)

Because in second and higher marriages, a woman is more likely than in a first marriage to have children whose father is not her spouse, and the dissolution of a previous marriage may affect her expectations about the duration of her current marriage, the decrease in labor supply that frequently accompanies marriage may be dampened for second and later marriages. I investigate this possibility using data from the PSID. Because differences in work behavior may be the result of either the marital transitions or differences, observed or unobserved, between those who have one versus multiple marriages, a simple comparison of changes in labor supply associated with a first versus higher marriages may erroneously attribute the effects to remarriage. To correct for the unobserved heterogeneity, I estimate an individual fixed-effect, and use state-level variation in sex ratios and divorce laws to identify the impact of marital decisions on labor supply.