Dynamic labour force participation of married women in Sweden

Abstract

This paper analyzes the inter-temporal labor force participation behavior of married women in Sweden. A dynamic probit model is applied, controlling for endogenous initial condition and unobserved heterogeneity, using longitudinal data to allow for a rich dynamic structure. Significant unobserved heterogeneity is found, along with serial correlation in the error components, and negative state dependence. The findings may indicate serial persistence due to persistent individual heterogeneity.