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Abstract
Wage growth occurs almost exclusively in full-time work, whereas it is close to zero in part-time work. German women, when asked to predict their own potential wage outcomes, show severely biased expectations with strong over-optimism about the returns to part-time experience. We estimate a structural life-cycle model to quantify how beliefs influence labor supply, earnings and welfare over the life cycle. The bias increases part-time employment strongly, induces flatter long-run wage profiles, and substantially influences the employment effects of a widely discussed policy reform, the introduction of joint taxation. The most significant impact of the bias appears for college-educated women.
| Dokumententyp: | Paper |
|---|---|
| Keywords: | returns to experience; biased beliefs; part-time work; dynamic life-cycle models |
| Fakultät: | Volkswirtschaft > Collaborative Research Center Transregio "Rationality and Competition" |
| Themengebiete: | 300 Sozialwissenschaften > 330 Wirtschaft |
| JEL Classification: | D63, H23, I24, I38, J22, J31 |
| URN: | urn:nbn:de:bvb:19-epub-105140-5 |
| Sprache: | Englisch |
| Dokumenten ID: | 105140 |
| Datum der Veröffentlichung auf Open Access LMU: | 31. Jul. 2023, 09:00 |
| Letzte Änderungen: | 03. Jan. 2024, 09:59 |
| DFG: | Gefördert durch die Deutsche Forschungsgemeinschaft (DFG) - 280092119 |
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