Labor force participation among low-income married women

Results from a fixed effects, conditional legit model developed by Chamberlain, estimated with panel data drawn from the Michigan Panel Study of Income Dynamics, are provided in a study of the probability of labor force participation by low-income black and white married women. Women from low-income households may have stronger tastes for market work than women from wealthier households. Moreover, if credit constraints limiting the capacity to borrow are present in low-income households, a wife's demand for leisure might depend upon the level of the husband's earnings and nonlabor income. The empirical results indicate that past labor market association and the presence of school age children are significant factors increasing the probability of participation by low-income black women. The presence of preschool children in addition to past market experience has an effect on the decisions made by low-income white women to participate in the labor force. The effects of husband wage and nonlabor income on wives' labor force participation is through the marginal utility of initial wealth.