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Household labor supply in urban areas of Bolivia

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  • Pradhan, M.P.

    (Tilburg University)

  • Soest, A.H.O. van

    (Tilburg University)

Abstract

We analyze labor supply behavior and the choice between formal and informal sector work of the two spouses in families in urban areas of a developing country, using cross-section data from Bolivia drawn in 1989. The model generalizes the neoclassical family labor supply model. Nonmonetary returns of formal sector employment capture the fact that the choice between sectors is not exclusively based on wage differentials. Wage equations, nonmonetary returns equations, and labor supply equations are estimated jointly by smooth simulated maximum likelihood. We find substantial cross - wage elasticities of working hours of both partners, and large substitution elasticities between the two sectors. © 1997 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology

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Bibliographic Info

Paper provided by Tilburg University in its series Open Access publications from Tilburg University with number urn:nbn:nl:ui:12-74119.

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Date of creation: 1997
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Publication status: Published in Review of Economics and Statistics (1997) v.79, p.300-310
Handle: RePEc:ner:tilbur:urn:nbn:nl:ui:12-74119

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Web page: http://www.tilburguniversity.edu/

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  1. Pradhan, M.P. & Soest, A.H.O. van, 1993. "Formal and informal sector employment in urban areas of Bolivia," Discussion Paper, Tilburg University, Center for Economic Research 1993-11, Tilburg University, Center for Economic Research.
  2. Ransom, Michael R, 1987. "An Empirical Model of Discrete and Continuous Choice in Family Labor Supply," The Review of Economics and Statistics, MIT Press, vol. 69(3), pages 465-72, August.
  3. 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.
  4. Gourieroux, Christian & Monfort, Alain, 1993. "Simulation-based inference : A survey with special reference to panel data models," Journal of Econometrics, Elsevier, Elsevier, vol. 59(1-2), pages 5-33, September.
  5. Borsch-Supan, Axel & Hajivassiliou, Vassilis A., 1993. "Smooth unbiased multivariate probability simulators for maximum likelihood estimation of limited dependent variable models," Journal of Econometrics, Elsevier, Elsevier, vol. 58(3), pages 347-368, August.
  6. Magnac, Th, 1991. "Segmented or Competitive Labor Markets," Econometrica, Econometric Society, Econometric Society, vol. 59(1), pages 165-87, January.
  7. Kapteyn, A.J. & Kooreman, P. & Soest, A.H.O. van, 1990. "Quantity rationing and concavity in a flexible household labor supply model," Open Access publications from Tilburg University, Tilburg University urn:nbn:nl:ui:12-364376, Tilburg University.
  8. Soest, A.H.O. van & Kapteyn, A.J. & Kooreman, P., 1993. "Coherency and regularity of demand systems with equality and inequality constraint," Open Access publications from Tilburg University, Tilburg University urn:nbn:nl:ui:12-364384, Tilburg University.
  9. Laroque, Guy & Salanie, Bernard, 1989. "Estimation of Multi-market Fix-Price Models: An Application of Pseudo Maximum Likelihood Methods," Econometrica, Econometric Society, Econometric Society, vol. 57(4), pages 831-60, July.
  10. Pradhan, M., 1993. "Sector Participation in Labour Supply Models: Preference or Rationing?," Papers, Tilburg - Center for Economic Research 9366, Tilburg - Center for Economic Research.
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