The Effect of Work Experience on Female Wages and Labour Supply

This paper develops and implements a semiparametric estimator for investigating, with panel data, the importance of human capital and time nonseparable preferences to females when aggregate shocks are present. It provides a set of conditions for making statistical inferences about agents' expectations of their correlated future choices from a short panel. Under the assumption that observed allocations are Pareto optimal, a dynamic model of female labor supply and participation is estimated in which experience on the job raises future wages and time spent off the job in the past directly affects current utility (or indirectly through productivity in the nonmarket sector). Copyright 1998 by The Review of Economic Studies Limited.