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Institutional Constraints and Random Heterogeneity in Structural Discrete Choice Models of Household Labour Supply

Author

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  • Alan Duncan

Abstract

Despite a growing literature in the application of Conditional or Mixed Logit methods to the estimation of labour supply models, relatively little attention has been paid to the role of institutional constraints in employment choices. We argue that the failure adequately to control for optimising errors in models of this form lead to substantial biases in structural preference parameters. We show how an alternative class of DOGEV estimator can be used to control for general patterns of optimising error in models of this form, and provide empirical examples of the effects such errors have on modelled preferences

Suggested Citation

  • Alan Duncan, 2004. "Institutional Constraints and Random Heterogeneity in Structural Discrete Choice Models of Household Labour Supply," Econometric Society 2004 Australasian Meetings 342, Econometric Society.
    • Handle: RePEc:ecm:ausm04:342
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    More about this item

    Keywords

    labour supply models; employment choices; modelling institutional constraints;
    All these keywords.

    JEL classification:

    • A - General Economics and Teaching

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