Nonparametric Analysis of Cross Section Labor Supply Curves
AbstractThis 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 InfoPaper provided by University of Bonn, Germany in its series Discussion Paper Serie A with number 586.
Date of creation: Nov 1998
Date of revision:
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Labor Supply Curve; Multivariate Local Linear Regression; Wage Elasticity;
Find related papers by JEL classification:
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
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- 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.
- 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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