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The estimation of utility-consistent labor supply models by means of simulated scores Author info | Abstract | Publisher info | Download info | Related research | Statistics Hans G. Bloemen (Department of Economics, Free University Amsterdam, Amsterdam, The Netherlands)
Arie Kapteyn (Rand Corporation, Santa Monica (California), USA)
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We consider a utility-consistent static labor supply model with flexible preferences and a nonlinear and possibly non-convex budget set. Stochastic error terms are introduced to represent optimization and reporting errors, stochastic preferences, and heterogeneity in wages. Coherency conditions on the parameters and the support of error distributions are imposed for all observations. The complexity of the model makes it impossible to write down the probability of participation. Hence we use simulation techniques in the estimation. We compare our approach with various simpler alternatives proposed in the literature. Both in Monte Carlo experiments and for real data the various estimation methods yield very different results. Copyright © 2008 John Wiley & Sons, Ltd.
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Article provided by John Wiley & Sons, Ltd. in its journal Journal of Applied Econometrics .
Volume (Year): 23 (2008)
Issue (Month): 4 ()
Pages: 395-422
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Handle: RePEc:jae:japmet:v:23:y:2008:i:4:p:395-422Contact details of provider: Web page: http://www.interscience.wiley.com/jpages/0883-7252/
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Paper Bloemen, H.G. & Kapteyn, A., 1993.
"The Estimation of Utility Consistent Labor Supply Models by Means of Simulated Scores ,"
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Bloemen, Hans G. & Kapteyn, Arie, 2003.
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Serie Research Memoranda
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John K. Dagsvik and Zhiyang Jia, 2008.
"An Alternative Approach to Labor Supply Modeling. Emphasizing Job-type as Choice Variable ,"
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