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Female labour supply in Spain: The importance of behavioural assumptions and unobserved heterogeneity specification

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  • Jaume Garcia

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  • María J. Suárez

Abstract

We estimate four models of female labour supply using a Spanish sample of married women from 1994, taking into account the complete form of the individual’s budget set. The models differ in the hypotheses relating to the presence of optimisation errors and/or the way non-workers contribute to the likelihood function. According to the results, the effects of wages and non-labour income on the labour supply of Spanish married women depend on the specification used. The model which has both preference and optimisation errors and allows for both voluntarily and involuntarily unemployed females desiring to participate seems to better fit the evidence for Spanish married women.

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Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 542.

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Date of creation: Mar 2001
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Handle: RePEc:upf:upfgen:542

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Web page: http://www.econ.upf.edu/

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Keywords: Labour supply; taxes; unobserved heterogeneity;

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