DP302 | Employment Dynamics Among British Lone Mothers

Publication Date

01/02/1989

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Abstract

We adopt a stochastic model of labor market turnover in order to analyze entries to and exits from paid employment by British lone mothers. We estimate the model using demographic and employment history data from the 1980 Women and Employment Survey. The theoretical model predicts that the exit rate falls and entry rises with a higher woman's human capital wage, and that a higher utility flow received when out of employment has the opposite effects. These predictions are generally confirmed by the parameter estimates, although welfare benefits received when not employed are only found to discourage employment in a restricted model that is rejected by the data.