Advanced Search
MyIDEAS: Login to save this paper or follow this series

Discrete Hours Labour Supply Modelling: Specification, Estimation and Simulation

Contents:

Author Info

  • John Creedy

    ()
    (The Treasury, Wellington, New Zealand)

  • Guyonne Kalb

    ()
    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

The assumption behind discrete hours labour supply modelling is that utility-maximising individuals choose from a relatively small number of hours levels, rather than being able to vary hours worked continuously. Such models are becoming widely used in view of their substantial advantages, compared with a continuous hours approach, when estimating and their role in tax policy microsimulation. This paper provides an introduction to the basic analytics of discrete hours labour supply modelling. Special attention is given to model specification, maximum likelihood estimation and microsimulation of tax reforms. The analysis is at each stage illustrated by the use of numerical examples.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.melbourneinstitute.com/downloads/working_paper_series/wp2003n16.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2003n16.

as in new window
Length: 45 pages
Date of creation: Jun 2003
Date of revision:
Handle: RePEc:iae:iaewps:wp2003n16

Contact details of provider:
Postal: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia
Phone: +61 3 8344 2100
Fax: +61 3 8344 2111
Email:
Web page: http://www.melbourneinstitute.com/
More information through EDIRC

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Tim Callan & Arthur Van Soest, 1996. "Family Labour Supply and Taxes in Ireland," Papers, Economic and Social Research Institute (ESRI) WP078, Economic and Social Research Institute (ESRI).
  2. Hoynes, Hilary Williamson, 1996. "Welfare Transfers in Two-Parent Families: Labor Supply and Welfare Participation under AFDC-UP," Econometrica, Econometric Society, Econometric Society, vol. 64(2), pages 295-332, March.
  3. Hausman, Jerry A, 1985. "The Econometrics of Nonlinear Budget Sets," Econometrica, Econometric Society, Econometric Society, vol. 53(6), pages 1255-82, November.
  4. Bingley, P. & Walker, I., 2000. "Housing Subsidies and Work Incentives in Great Britain," The Warwick Economics Research Paper Series (TWERPS) 559, University of Warwick, Department of Economics.
  5. Guyonne Kalb, 2002. "Estimation of Labour Supply Models for Four Separate Groups in the Australian Population," Melbourne Institute Working Paper Series, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne wp2002n24, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  6. Hausman, Jerry A., 1979. "The econometrics of labor supply on convex budget sets," Economics Letters, Elsevier, Elsevier, vol. 3(2), pages 171-174.
  7. Wales, Terence J & Woodland, A D, 1977. "Estimation of the Allocation of Time for Work, Leisure, and Housework," Econometrica, Econometric Society, Econometric Society, vol. 45(1), pages 115-32, January.
  8. A. Zabalza & C. Pissarides & M. Barton, 1980. "Social security and the choice between full-time work, part-time work and retirement," NBER Chapters, in: Econometric Studies in Public Finance, pages 245-276 National Bureau of Economic Research, Inc.
  9. Soest, A.H.O. van & Woittiez, I.B. & Kapteyn, A.J., 1989. "Labour supply, income taxes and hours restrictions in the Netherlands," Discussion Paper, Tilburg University, Center for Economic Research 1989-3, Tilburg University, Center for Economic Research.
  10. Apps, P.F. & Rees, R., 1993. "Labour Supply, Household Production and Intra-Family Welfare Distribution," Working Papers, University of Guelph, Department of Economics and Finance 1993-3, University of Guelph, Department of Economics and Finance.
  11. Euwals, Rob & van Soest, Arthur, 1999. "Desired and actual labour supply of unmarried men and women in the Netherlands," Labour Economics, Elsevier, Elsevier, vol. 6(1), pages 95-118, March.
  12. Chiappori, Pierre-Andre, 1988. "Rational Household Labor Supply," Econometrica, Econometric Society, Econometric Society, vol. 56(1), pages 63-90, January.
  13. Thomas MaCurdy & David Green & Harry Paarsch, 1990. "Assessing Empirical Approaches for Analyzing Taxes and Labor Supply," Journal of Human Resources, University of Wisconsin Press, vol. 25(3), pages 415-490.
  14. Kooreman, Peter & Kapteyn, Arie, 1987. "A Disaggregated Analysis of the Allocation of Time within the Household," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 95(2), pages 223-49, April.
  15. Paul A. Hagstrom, 1996. "The Food Stamp Participation and Labor Supply of Married Couples: An Empirical Analysis of Joint Decisions," Journal of Human Resources, University of Wisconsin Press, vol. 31(2), pages 383-403.
  16. Mark N. Harris & Alan Duncan, 2002. "Intransigencies in the Labour Supply Choice," Melbourne Institute Working Paper Series, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne wp2002n17, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  17. Duncan, Alan & Harris, Mark N, 2002. "Simulating the Behavioural Effects of Welfare Reforms among Sole Parents in Australia," The Economic Record, The Economic Society of Australia, The Economic Society of Australia, vol. 78(242), pages 264-76, September.
  18. Moffitt, Robert, 1986. "The Econometrics of Piecewise-Linear Budget Constraints: A Survey and Exposition of the Maximum Likelihood Method," Journal of Business & Economic Statistics, American Statistical Association, American Statistical Association, vol. 4(3), pages 317-28, July.
  19. Browning, M. & Bourguignon, F. & Chiappori, P.A. & Lechene, V., 1992. "Incomes and Outcomes: A structural Model of Intra-Household Allocation," DELTA Working Papers, DELTA (Ecole normale supérieure) 92-23, DELTA (Ecole normale supérieure).
  20. Fraker, Thomas & Moffitt, Robert, 1988. "The effect of food stamps on labor supply : A bivariate selection model," Journal of Public Economics, Elsevier, Elsevier, vol. 35(1), pages 25-56, February.
  21. Kapteyn, A. & Soest, A.V. & Woittiez, I., 1989. "Labour Supply, Income Taxes And Hours Restrictions In The Netherlands," Papers, Tilburg - Center for Economic Research 8903, Tilburg - Center for Economic Research.
  22. McFadden, Daniel, 1974. "The measurement of urban travel demand," Journal of Public Economics, Elsevier, Elsevier, vol. 3(4), pages 303-328, November.
  23. Burtless, Gary & Hausman, Jerry A, 1978. "The Effect of Taxation on Labor Supply: Evaluating the Gary Negative Income Tax Experiments," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 86(6), pages 1103-30, December.
  24. Michael Gerfin & Robert E. Leu, 2003. "The Impact of In-Work Benefits on Poverty and Household Labour Supply. A simulation study for Switzerland," Diskussionsschriften, Universitaet Bern, Departement Volkswirtschaft dp0304, Universitaet Bern, Departement Volkswirtschaft.
  25. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, American Economic Association, vol. 73(5), pages 1023-35, December.
  26. Tom Kornstad & Thor O. Thoresen, 2002. "A Discrete Choice Model for Labor Supply and Child Care," Discussion Papers, Research Department of Statistics Norway 315, Research Department of Statistics Norway.
  27. Aaberge, Rolf & Dagsvik, John K & Strom, Steinar, 1995. " Labor Supply Responses and Welfare Effects of Tax Reforms," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 97(4), pages 635-59, December.
  28. Creedy, John & Duncan, Alan, 2002. " Behavioural Microsimulation with Labour Supply Responses," Journal of Economic Surveys, Wiley Blackwell, Wiley Blackwell, vol. 16(1), pages 1-39, February.
  29. Paul Bingley & Gauthier Lanot & Elizabeth Symons & Ian Walker, 1995. "Child Support Reform and the Labor Supply of Lone Mothers in the United Kingdom," Journal of Human Resources, University of Wisconsin Press, vol. 30(2), pages 256-279.
  30. Aaberge, Rolf & Colombino, Ugo & Strom, Steinar, 1999. "Labour Supply in Italy: An Empirical Analysis of Joint Household Decisions, with Taxes and Quantity Constraints," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 14(4), pages 403-22, July-Aug..
  31. Richard Blundell & Alan Duncan & Julian McCrae & Costas Meghir, 2000. "The labour market impact of the working families’ tax credit," Fiscal Studies, Institute for Fiscal Studies, vol. 21(1), pages 75-103, March.
  32. Guyonne Kalb & Rosanna Scutella & Hsein Kew, 2002. "Estimation of Wage Equations in Australia: Allowing for Censored Observations of Labour Supply," Melbourne Institute Working Paper Series, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne wp2002n26, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  33. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, Econometric Society, vol. 52(3), pages 761-66, May.
  34. Arthur van Soest, 1995. "Structural Models of Family Labor Supply: A Discrete Choice Approach," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 63-88.
  35. M. Keane & R. Mofitt, 1995. "A Structural Model of Multiple Welfare Program Participation and Labor Supply," Working Papers 95-4, Brown University, Department of Economics.
  36. Apps, Patricia F & Rees, Ray, 1997. "Collective Labor Supply and Household Production," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 105(1), pages 178-90, February.
  37. Bingley, Paul & Walker, Ian, 1997. "The Labour Supply, Unemployment and Participation of Lone Mothers in In-Work Transfer Programmes," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 107(444), pages 1375-90, September.
  38. repec:fth:stanho:e-90-11 is not listed on IDEAS
  39. John Creedy & Guyonne Kalb & Hsein Kew, 2003. "Flattening the Effective Marginal Tax Rate Structure in Australia: Policy Simulations Using the Melbourne Institute Tax and Transfer Simulator," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 36(2), pages 156-172.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:iae:iaewps:wp2003n16. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (James Davis).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.