Determinants of Divorced Older Women's Labor Supply

Abstract

Unmarried older women, especially older divorcées, face a disproportionate risk of poverty. Despite the potential ameliorative effect of wages in addressing economic need, few studies have investigated the work behavior, retirement, and retirement income of unmarried older women. Using a nationally representative sample from the March 1989 Current Population Survey, this study addressed two research questions: What factors significantly affect divorcées', aged 55 and older, labor supply? Are these effects different for divorced as compared to other unmarried women? A sample selection model of labor supply indicated that wages, education, pension wealth, and asset wealth are significant predictors of labor supply for both the divorced and the other unmarried women, although the strength of these effects differed. Medicaid coverage had a significant effect for the divorced women only. The results suggest that wages are a limited, yet important, resource for unmarried older women, especially for older divorcées.