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

Equilibrium policy simulations with random utility models of labour supply

Contents:

Author Info

Abstract

Many microeconometric models of discrete labour supply include alternative-specific constants meant to account for (possibly besides other factors) the density or accessibility of particular types of jobs (e.g. parttime jobs vs. full-time jobs). The most common use of these models is the simulation of tax-transfer reforms. The simulation is usually interpreted as a comparative static exercise, i.e. the comparison of different equilibria induced by different policy regimes. The simulation procedure, however, typically keeps fixed the estimated alternative-specific constants. In this note we argue that this procedure is not consistent with the comparative statics interpretation. Equilibrium means that the number of people willing to work on the various job types must be equal to the number of available jobs. Since the constants reflect the number of jobs and since the number of people willing to work change as a response to the change in tax-transfer regime, it follows that the constants should also change. A structural interpretation of the alternative-specific constants leads to the development of a simulation procedure consistent with the comparative static interpretation. The procedure is illustrated with an empirical example.

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.unito.it/unitoWAR/ShowBinary/FSRepo/D031/Allegati/WP2010Dip/15_WP_Colombino.pdf
Download Restriction: no

Bibliographic Info

Paper provided by University of Turin in its series Department of Economics and Statistics Cognetti de Martiis. Working Papers with number 201015.

as in new window
Length: 14 pages
Date of creation: Oct 2010
Date of revision:
Handle: RePEc:uto:dipeco:201015

Contact details of provider:
Postal: Lungo Dora Siena 100, I-10153 Torino
Phone: +39 011670 4406
Fax: +39 011670 3895
Web page: http://www.unito.it/
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. Rolf Aaberge & Ugo Colombino, 2010. "Accounting for family background when designing optimal income taxes: A microeconometric simulation analysis," Working Papers 157, ECINEQ, Society for the Study of Economic Inequality.
  2. Colombino Ugo, 2010. "Equilibrium policy simulations with random utility models of labour supply," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201015, University of Turin.
  3. Colombino, Ugo & Locatelli, Marilena & Narazani, Edlira & O'Donoghue, Cathal, 2010. "Alternative Basic Income Mechanisms: An Evaluation Exercise with a Microeconometric Model," IZA Discussion Papers 4781, Institute for the Study of Labor (IZA).
  4. Colombino, Ugo, 2011. "Five Issues in the Design of Income Support Mechanisms: The Case of Italy," IZA Discussion Papers 6059, Institute for the Study of Labor (IZA).
  5. John Creedy & Alan Duncan, 2001. "Aggregating labour supply and feedback effects in microsimulation," IFS Working Papers W01/24, Institute for Fiscal Studies.
  6. John K. Dagsvik & Steinar Strøm, 2004. "Sectoral Labor Supply, Choice Restrictions and Functional Form," Discussion Papers 388, Research Department of Statistics Norway.
  7. repec:ese:emodwp:em9-01 is not listed on IDEAS
  8. Rolf Aaberge & Ugo Colombino, 2011. "Empirical Optimal Income Taxation: A Microeconometric Application to Norway," CHILD Working Papers wp16_11, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
  9. John K. Dagsvik, 1996. "Aggregation in Matching Markets," Discussion Papers 173, Research Department of Statistics Norway.
  10. Dagsvik, John K, 1994. "Discrete and Continuous Choice, Max-Stable Processes, and Independence from Irrelevant Attributes," Econometrica, Econometric Society, vol. 62(5), pages 1179-1205, September.
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:
  1. Ugo Colombino, 2011. "Five issues in the design of income support mechanisms. The case of Italy," CHILD Working Papers wp21_11, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
  2. Colombino, Ugo, 2010. "Equilibrium Policy Simulations with Random Utility Models of Labour Supply," IZA Discussion Papers 5262, Institute for the Study of Labor (IZA).
  3. Colombino Ugo & Narazani Edlira, 2013. "Designing a Universal Income Support Mechanism for Italy: An Exploratory Tour," Basic Income Studies, De Gruyter, vol. 8(1), pages 1-17, July.

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:uto:dipeco:201015. 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: (Piero Cavaleri) or (Marina Grazioli).

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.