The purpose of this paper is to critically review the literature to assess the relevance of the S‐shaped model of family labor supply for industrialized countries.
Studies use a wide variety of methodologies and therefore are not readily comparable, but instead they cover a wide range of relevant factors such as historical trends, fringe benefits and home mortgages, ethnic differences, farm labor, low‐income households, child care, the impact of welfare benefits, and the problem of the measurement of work hours.
In spite of welfare systems that blur somewhat the predicted income effect at lower wage levels (forward falling segment primarily for women), this model appears to still bear some relevance for these countries, in particular in the face of declining real wages. Families have generally moved up higher along that curve, with less differentiated gender roles, women's stronger labor force attachment, and assortative mating of educated women.
The model is mostly relevant for LDCs and has far‐reaching practical consequences, while the review highlights the complexity of labor supply in industrialized countries.
