Labour supply and wages among nuclear and extended households: The Surinamese experiment

Abstract

This article explores labour market behaviour of members of extended and nuclear households in Suriname. Previous analyses have found that co‐operative childcare opportunities within the extended household increase female labour force participation. Such coordination implies correlated participation decisions, which invalidates standard assumptions made in estimating participation with probits and wages with regressions. We employ a GMM estimation, which allows correlation among household members. We find that extended and nuclear household members are not significantly different in participation propensities, but do differ significantly in wages. We argue that greater home production opportunities in extended households dilute labour market effort and hours, reducing earnings.