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Nonparametric Analysis of Cross Section Labor Supply Curves

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Author Info

  • Jang, I.

Abstract

This paper studies the cross section labor supply curves of six different groups of workers - single male and female, married couple with nonworking spouse, and married couple with working spouse - using 1991 U.S. Consumer Expenditure Survey. Most existing empirical studies assume a simple linear functional form that does not allow the possibility of backward bending behavior for the sake of convenience in modelling. Multivariate local linear regression adopted in this paper shows significant nonlinearities and backward bending behavior of labor supply curve with respect to wage. This might be interpreted as an evidence against the possibility of exact aggregation of individual labor supply curves. Besides, it also shows that the elasticity measures of the parametric functions can be quite misleading.

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Bibliographic Info

Paper provided by University of Bonn, Germany in its series Discussion Paper Serie A with number 586.

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Length: pages
Date of creation: Nov 1998
Date of revision:
Handle: RePEc:bon:bonsfa:586

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Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany
Fax: +49 228 73 6884
Web page: http://www.bgse.uni-bonn.de

Related research

Keywords: Labor Supply Curve; Multivariate Local Linear Regression; Wage Elasticity;

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Cited by:
  1. Anil Kumar, 2005. "Nonparametric estimation of the impact of taxes on female labor supply," Working Papers 0505, Federal Reserve Bank of Dallas.
  2. Kumar, Anil, 2008. "Labor supply, deadweight loss and tax reform act of 1986: A nonparametric evaluation using panel data," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 236-253, February.
  3. Volker Grossmann, 2003. "A Note on Redistributive Taxation, Labor Supply, and National Income," International Journal of Business and Economics, College of Business, and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 2(1), pages 39-48, April.
  4. Heinz Handler & Andreas Knabe & Bertrand Koebel & Margit Schratzenstaller & Sven Wehke, 2005. "The Impact of Public Budgets on Overall Productivity Growth," WIFO Working Papers 255, WIFO.

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