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

Table 8 Effects of small/medium/large 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
Small windfall gains dummy	−0.00442	−0.0920	−0.127	0.00806	0.00690
	(0.00712)	(0.272)	(0.275)	(0.00845)	(0.00877)
Medium windfall gains dummy	−0.00583	−0.0449	0.0757	−0.0111	−0.00479
	(0.00765)	(0.291)	(0.297)	(0.00897)	(0.00943)
Large windfall gains dummy	−0.0123	0.211	0.183	−0.00496	0.00332
	(0.0129)	(0.495)	(0.508)	(0.0154)	(0.0163)
Hourly wage		−0.759***	−0.0251
		(0.0385)	(0.330)
Log hourly wage				−0.442***	−0.148**
				(0.0103)	(0.0754)
aAge	0.0702***	2.660***	2.270***	0.0476***	0.0231***
	(0.00419)	(0.160)	(0.215)	(0.00532)	(0.00763)
Age^2	−0.000833***	−0.0315***	−0.0294***	−0.000357***	−0.000231***
	(4.77e-05)	(0.00182)	(0.00195)	(6.21e-05)	(6.81e-05)
Married dummy	0.00593	0.178	0.192	−0.0135	−0.0199
	(0.0105)	(0.402)	(0.419)	(0.0118)	(0.0126)
Children 0–6 in household dummy	−0.0758***	−4.824***	−4.893***	−0.122***	−0.130***
	(0.00915)	(0.350)	(0.363)	(0.0103)	(0.0109)
Children 7–15 in household dummy	−0.0513***	−3.308***	−3.232***	−0.0636***	−0.0643***
	(0.00808)	(0.308)	(0.313)	(0.00932)	(0.00974)
Constant	−0.715***	−23.90***	−16.58***	3.009***	3.237***
	(0.0906)	(3.466)	(4.341)	(0.110)	(0.121)
Observations	27988	27385	27021	17736	17511
Number of individuals	5308	5284	5261	4044	4021
R-squared	0.015	0.036		0.129
Hausman test⁺			0.005		0.004

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.