Single Mothers and Work

Western countries differ greatly in the extent to which single mothers participate in the labor market, both in absolute terms and relative to other women. Using data for 15 countries from the Luxembourg Income Study, I propose and estimate a simple structural model of labor supply that incorporates the main variables that influence the work decision for single mothers. The results from the structural estimation suggest that a large part of the cross country variation in the employment rates of single mothers can be explained by their different demographic characteristics and by the variation in expected income in the in-work versus out-of-work states. Older and more educated single mothers are more likely to work, while more and younger children reduce the probability of working. Women with higher expected earnings are more likely to work. Higher benefits in the out-of-work state discourage employment, and the opposite is true for in-work benefits. Single mothers with higher income from other sources, including child support, are less likely to work. Even after demographic and income variables are controlled for, the country dummies remain significant and, in some cases, sizeable. This indicates that other variables not explicitly incorporated in the model, such as childcare arrangements or social and cultural backgrounds, may also play a role in explaining the cross-country variation