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Job search, hours restrictions and desired hours of work

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  • Bloemen, H.G.

    (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics)

Abstract

We present a structural empirical job search model in which job offers are characterized by a wage rate and the length of the working week. The unemployed accept a job if the direct utility level of the wage-hours combination is higher than the reservation utility level. The latter is determined by the direct utility of being unemployed (depending on the value of leisure and the benefit level) and the expected gains of search. Specific attention is paid to identification, since the observed hours distribution is determined both by the hours offer distribution and by preferences over hours. To identify the hours offers and the optimal hours (defined by preferences) separately, we use information on desired working hours. We estimate three model variants: a base specification with only information on observed working hours, and two variants with desired hours, which differ from each other in the way in which the relation between desired hours and optimal hours is modeled. We compare the various specifications on basis of differences in the fit of the distribution of unemployment duration, observed working hours and desired working hours and on basis of differences in policy relevant elasticities.

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Bibliographic Info

Paper provided by VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics in its series Serie Research Memoranda with number 0038.

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Date of creation: 2002
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Handle: RePEc:dgr:vuarem:2002-38

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Web page: http://www.feweb.vu.nl

Related research

Keywords: job search; duration models; labour supply; simulation estimates;

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  1. Narendranathan, Wiji & Nickell, Stephen, 1985. "Modelling the process of job search," Journal of Econometrics, Elsevier, vol. 28(1), pages 29-49, April.
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Cited by:
  1. John Dagsvik & Zhiyang Jia & Kristian Orsini & Guy Camp, 2011. "Subsidies on low-skilled workers’ social security contributions: the case of Belgium," Empirical Economics, Springer, vol. 40(3), pages 779-806, May.
  2. John K. Dagsvik & Zhiyang Jia & Tom Kornstad & Thor O. Thoresen, 2014. "Theoretical And Practical Arguments For Modeling Labor Supply As A Choice Among Latent Jobs," Journal of Economic Surveys, Wiley Blackwell, vol. 28(1), pages 134-151, 02.
  3. Flabbi, Luca & Moro, Andrea, 2010. "The Effect of Job Flexibility on Female Labor Market Outcomes: Estimates from a Search and Bargaining Model," IZA Discussion Papers 4829, Institute for the Study of Labor (IZA).
  4. Paul Sullivan & Ted To, 2014. "Search and Nonwage Job Characteristics," Journal of Human Resources, University of Wisconsin Press, vol. 49(2), pages 472-507.
  5. Flabbi, Luca & Mabli, James, 2012. "Household Search or Individual Search: Does It Matter? Evidence from Lifetime Inequality Estimates," IZA Discussion Papers 6908, Institute for the Study of Labor (IZA).
  6. Egbert Jongen, 2009. "An analysis of individual accounts for the unemployment risk in the Netherlands," CPB Document 186, CPB Netherlands Bureau for Economic Policy Analysis.
  7. John K. Dagsvik & Zhiyang Jia, 2008. "An Alternative Approach to Labor Supply Modeling. Emphasizing Job-type as Choice Variable," Discussion Papers 550, Research Department of Statistics Norway.
  8. Hans G. Bloemen, 2010. "Income Taxation in an Empirical Collective Household Labour Supply Model with Discrete Hours," Tinbergen Institute Discussion Papers 10-010/3, Tinbergen Institute.
  9. John K. Dagsvik & Zhiyang Jia, 2012. "Labor supply as a discrete choice among latent jobs," Discussion Papers 709, Research Department of Statistics Norway.
  10. Keith A. Bender & John Douglas Satun, 2009. "Constrained By Hours And Restricted In Wages: The Quality Of Matches In The Labor Market," Economic Inquiry, Western Economic Association International, vol. 47(3), pages 512-529, 07.
  11. Magali Beffy & Richard Blundell & Antoine Bozio & Guy Laroque, 2014. "Labour supply and taxation with restricted choices," IFS Working Papers W14/04, Institute for Fiscal Studies.

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