Open AccessDiscouraged Worker Effect and Labor Market Behavior of Urban Married Women
Author(s) -
Deeksha Tayal,
Sourabh Paul
Publication year - 2021
Publication title -
asian development review
Language(s) - English
Resource type - Journals
eISSN - 1996-7241
pISSN - 0116-1105
DOI - 10.1142/s0116110521500098
Subject(s) - underemployment , economics , wage , labour economics , probit model , probit , split labor market theory , ordered probit , demographic economics , unemployment , secondary labor market , econometrics , labor relations , economic growth
The study investigates the importance of poor local labor market conditions in explaining the labor market behavior of married women in urban India. Using nationally representative employment data, we empirically test for the existence of a discouraged worker effect arising from either of two mechanisms: (i) unexplained gender wage gap, or (ii) degree of underemployment. A three-stage, district-level analysis of female labor market behavior was undertaken, and selectivity bias was controlled for by using censored probit in the second stage and trivariate probit with Geweke–Hajivassiliou–Keane smooth recursive simulator technique in the third stage of this multilevel framework. We find evidence that the wage gap discourages women from participating in the labor market and the prevalence of underemployment, in terms of overqualification by occupation, discourages them from exploring better job opportunities by making on-job search efforts.