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Sectoral labour supply, choice restrictions and functional form
By Dagsvik, John K, and Steinar Strøm
2006
Journal of Applied Econometrics, 21, 803-826
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Abstract |
In this paper we discuss a general framework for analysing labour supply behaviour in the presence of
complicated budget and quantity constraints, of which some are unobserved. The individual’s labour supply
decision is viewed as a choice from a set of discrete alternatives (jobs). These jobs are characterized by
attributes such as hours of work, sector-specific wages and other sector-specific aspects of the jobs.
The labour supply model for married women is estimated on Norwegian data. Wage elasticities and the
outcome of a tax reform experiment show that overall labour supply is moderately elastic, but these modest
overall responses shadow for much stronger inter-sectoral changes. Our model is compared with a discrete
choice model in which the utility is assumed to be a polynomial. We show that our estimated model has a
more economically sensible interpretation and fits the data as well as the alternative approach. Copyright ?
2006 John Wiley & Sons, Ltd. |
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1143 Evaluation of tax reforms 1992, labor supply effects
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john.dagsvik@ssb.no |
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