Employment Dynamics of Greek Married Women

This paper investigates the dynamics of the labour market participation behaviour of Greek married women. Longitudinal-panel-data for the period 1995-2001 and dynamic discrete choice models are used for estimation purposes. We find that the probability of participation is influenced by observed individual characteristics (e.g., human capital, fertility and unearned income) while genuine state dependence and unobserved heterogeneity constitute major sources of observed serial persistence. The results show that lagged participation affects in a systematic way current participation decisions and that the non-contemporaneous effects of unearned income and fertility correlate with unobserved heterogeneity. The estimated average partial effects reveal that an employed in t-1 woman has a probability of being employed in t that is almost 30 percentage points higher than a non-participating one. The presence of state dependence and unobserved heterogeneity implies that the bridging of the female participation gap between Greece and its E.U. partners is expected to follow a slow long-term course