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Desired and actual labour supply of unmarried men and women in the Netherlands

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  • Euwals, Rob
  • van Soest, Arthur

Abstract

Desired and actual working hours of unmarried adults are analyzed.A discrete structural neoclassical model is used to explain desired hours.Desired hours depend on gross wage rates, tax and benefit rules, other income, and some background variables.The model takes account of fixed costs of working and of prediction errors in wage rates of nonworkers.Actual hours are explained from desired hours and hours restrictions.Deviations between actual and desired hours are used to identify equations for involuntary unemployment and the lack of part-time jobs.Explanatory variables include age, education level, and the difference between potential earnings and some reference (minimum) wage.The model is estimated using cross-section data from the October 1988 wave of the Dutch Socio-Economic Panel.We find larger wage elasticities of desired hours of work for females than for males.People with potential earnings below their reference wage have a significantly larger probability of involuntary unemployment than others.Apart from involuntary unemployment, the lack of part-time jobs appears to be an important source of hours restrictions.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 6 (1999)
Issue (Month): 1 (March)
Pages: 95-118

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Handle: RePEc:eee:labeco:v:6:y:1999:i:1:p:95-118

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  1. Soest, Arthur van & Kapteyn, Arie & Kooreman, Peter, 1993. "Coherency and regularity of demand systems with equality and inequality constraints," Journal of Econometrics, Elsevier, vol. 57(1-3), pages 161-188.
  2. Meyer, Robert H & Wise, David A, 1983. "The Effects of the Minimum Wage on the Employment and Earnings of Youth," Journal of Labor Economics, University of Chicago Press, vol. 1(1), pages 66-100, January.
  3. William T. Dickens & Shelly J. Lundberg, 1985. "Hours Restrictions and Labor Supply," NBER Working Papers 1638, National Bureau of Economic Research, Inc.
  4. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
  5. Hausman, Jerry A, 1985. "The Econometrics of Nonlinear Budget Sets," Econometrica, Econometric Society, vol. 53(6), pages 1255-82, November.
  6. Martijn P. Tummers & Isolde Woittiez, 1991. "A Simultaneous Wage and Labor Supply Model with Hours Restrictions," Journal of Human Resources, University of Wisconsin Press, vol. 26(3), pages 393-423.
  7. Gourieroux, Christian & Monfort, Alain, 1993. "Simulation-based inference : A survey with special reference to panel data models," Journal of Econometrics, Elsevier, vol. 59(1-2), pages 5-33, September.
  8. Blundell, Richard & Ham, John & Meghir, Costas, 1987. "Unemployment and Female Labour Supply," Economic Journal, Royal Economic Society, vol. 97(388a), pages 44-64, Supplemen.
  9. Melenberg, B. & Soest, A.H.O. van, 1993. "Semi-parametric estimation of the sample selection model," Discussion Paper 1993-34, Tilburg University, Center for Economic Research.
  10. Blundell, Richard & Walker, Ian, 1986. "A Life-Cycle Consistent Empirical Model of Family Labour Supply Using Cross-Section Data," Review of Economic Studies, Wiley Blackwell, vol. 53(4), pages 539-58, August.
  11. Ilmakunnas, Seija & Pudney, Stephen, 1990. "A model of female labour supply in the presence of hours restrictions," Journal of Public Economics, Elsevier, vol. 41(2), pages 183-210, March.
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