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Nonparametric structural estimation of labor supply in the presence of censoring

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  • Liang, Che-Yuan

Abstract

This paper extends the nonparametric structural method to estimate labor supply developed by Blomquist and Newey (2002) to handle cases in which there are individuals who do not work. The method is then applied to married women in Sweden from 1973 to 1999. I find an uncompensated wage elasticity of 0.98 and an income elasticity of -0.10, with the participation margin accounting for one third of the wage elasticity and two thirds of the income elasticity. The elasticities vary, however, a lot over time due to differences in tax systems and demographics. I also find results consistent with tax rates being around the net government revenue maximizing rates.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 96 (2012)
Issue (Month): 1 ()
Pages: 89-103

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Handle: RePEc:eee:pubeco:v:96:y:2012:i:1:p:89-103

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Web page: http://www.elsevier.com/locate/inca/505578

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Keywords: Female labor supply; Nonparametric estimation; Nonlinear budget sets; Tax revenues;

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References

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Cited by:
  1. Pirttälä, Jukka & Selin, Håkan, 2011. "Tax Policy and Employment: How Does the Swedish System Fare?," Working Paper Series, Center for Fiscal Studies 2011:2, Uppsala University, Department of Economics.
  2. Liang, Che-Yuan, 2014. "Distribution-Free Structural Estimation with Nonlinear Budget Sets," Working Paper Series, Center for Fiscal Studies 2014:4, Uppsala University, Department of Economics.
  3. Liang, Che-Yuan, 2009. "Nonparametric Structural Estimation of Labor Supply in the Presence of Censoring," Working Paper Series 2009:8, Uppsala University, Department of Economics.

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