Effect of Uncertainty and Risk on the Allocation of Time of Married Women (Labor Supply, Divorce).

This dissertation examines how uncertainty and risk affect the decisions of married women concerning market work, work in the home, and leisure. It is divided into three parts. The first part focuses on family income uncertainty. A one period model is developed where the individual chooses among time spent in home production, market work, and leisure. In this theoretical model, the existence of uncertainty in the rate of return to household production reduces the number of hours allocated to work at home. The empirical findings indicate that the uncertainty variables are significant determinants both of participation in the market and of hours allocated to market work, home work, and leisure. For women whose husb and 's earn high incomes, uncertainty has a strong positive effect on the probability of participation and on hours allocated to the market. The second part deals with the probability of divorce and examines the relationships between several variables and the gains from marriage. Of the findings presented, the most important center on the effect of the wage rate on the gains from marriage and on the effect of the probability of divorce on the level of investment in market human capital. Although rising wages for women have frequently been cited as either a cause or a necessary condition for rising divorce rates, it was shown that this effect will only hold under certain conditions. An increase in the potential wage will unambiguously lower the gains from marriage only for women who are not currently labor force participants. The third part deals with how the probability of divorce affects decisions concerning time allocation. The empirical evidence suggests that the probability of divorce does influence the allocation of time of married women. Overall, women for whom the probability of divorce is high are both more likely to work in the market and to work more hours in this sector than are women for whom the probability of divorce is low. Thus, these results indicate that the increasing divorce rate may have contributed to increases in the labor force participation of married women.PhDLabor economicsUniversity of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/160739/1/8521001.pd