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Sectoral labour supply, choice restrictions and functional form

Sammendrag

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.

Om publikasjonen

Forfattere:

Dagsvik, John K, and Steinar Strøm

År:

2006

Tidsskrift:

Journal of Applied Econometrics

Serie:

Vitenskapelige tidskrift

Prosjekt:

1143 - Evaluation of tax reforms 1992, labor supply effects

Kontakt:

john.dagsvik@ssb.no