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Nonparametric Structural Estimation of Labor Supply in the Presence of Censoring

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Author Info
Liang, Che-Yuan () (Uppsala Center for Fiscal Studies)

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Abstract

This paper extends the nonparametric method to estimate labor supply developed by Blomquist and Newey (2002) to handle cases in which there are individuals who do not work. The method is then applied to married women in Sweden from 1973 to 1999. For 1999, I find an aggregate uncompensated wage elasticity around 1 and an aggregate income elasticity around -0.05. Furthermore, marginal tax rates are beyond the net government revenue maximizing rates. Despite large labor supply effects, the dramatic evolution of the tax system can only explain a small share of the 58 percent rise in female labor supply during this period.

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Publisher Info
Paper provided by Uppsala University, Department of Economics in its series Working Paper Series, Center for Fiscal Studies with number 2009:6.

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Length: 48 pages
Date of creation: 18 May 2009
Date of revision:
Handle: RePEc:hhs:uufswp:2009_006

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Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
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Web page: http://www.nek.uu.se/
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Related research
Keywords: female labor supply; nonparametric estimation; nonlinear budget sets; tax revenues;

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Find related papers by JEL classification:
C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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This page was last updated on 2009-11-8.

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