A Structural Labour Supply Model with Flexible Preferences
AbstractWe show how non-parametric flexibility can be attained in a structural labour supply model that can be used to analyse all sorts of (non-linear) tax and benefits reforms. The direct utility function is approximated with a series expansion. For given length of the expansion, the model is estimated by smooth simulated maximum likelihood, using Dutch data on labour supply of married females. Estimates of own and cross wage elasticities and tax reform effects suggest that a series expansion of order two is enough. Monte Carlo simulations show that the estimator performs very well, unless there is measurement error in the hours variable.
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Bibliographic InfoPaper provided by Tilburg University in its series Open Access publications from Tilburg University with number urn:nbn:nl:ui:12-119390.
Date of creation: 2001
Date of revision:
Publication status: Published in Journal of Econometrics (2001) v., p.-
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Web page: http://www.tilburguniversity.edu/
Other versions of this item:
- van Soest, Arthur & Das, Marcel & Gong, Xiaodong, 2002. "A structural labour supply model with flexible preferences," Journal of Econometrics, Elsevier, vol. 107(1-2), pages 345-374, March.
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