Windfall gains and labour supply: evidence from the European household panel

Table 4 Effects of windfall gains on working hours – women

Dependent variable:	Employment dummy	Working hours per week		Log working hours per week
	(1)	(2)	(3)	(4)	(5)
	FE	FE	FE IV	FE	FE IV
Windfall gains dummy	−0.00367	0.0201	0.0563	0.000261	0.00366
	(0.00558)	(0.213)	(0.216)	(0.00659)	(0.00687)
Hourly wage		−0.759***	−0.0268
		(0.0385)	(0.330)
Log hourly wage				−0.441***	−0.149**
				(0.0103)	(0.0752)
Age	0.0699***	2.651***	2.259***	0.0474***	0.0230***
	(0.00419)	(0.160)	(0.216)	(0.00532)	(0.00763)
Age^2	−0.000832***	−0.0314***	−0.0294***	−0.000357***	−0.000232***
	(4.77e-05)	(0.00182)	(0.00195)	(6.21e-05)	(6.81e-05)
Married dummy	0.00581	0.179	0.190	−0.0135	−0.0198
	(0.0105)	(0.402)	(0.420)	(0.0118)	(0.0125)
Children 0–6 in household dummy	−0.0757***	−4.828***	−4.893***	−0.122***	−0.130***
	(0.00915)	(0.350)	(0.362)	(0.0103)	(0.0109)
Children 7–15 in household dummy	−0.0512***	−3.309***	−3.232***	−0.0635***	−0.0643***
	(0.00808)	(0.308)	(0.313)	(0.00932)	(0.00974)
Constant	−0.705***	−23.60***	−16.21***	3.015***	3.245***
	(0.0907)	(3.472)	(4.363)	(0.110)	(0.121)
Observations	27988	27385	27021	17736	17511
Number of individuals	5308	5284	5261	4044	4021
R-squared	0.015	0.036		0.128
Hausman test⁺			0.003		0.001

Standard errors in parentheses, *significant at 10%; **significant at 5%; ***significant at 1%. ⁺Reports p-value of the Hausman test of endogeneity. In IV regression (log) hourly wage is instrumented using two dummies for education, interactions between education dummies and quartic in age and country-year dummies. All regressions include individual fixed-effects.