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Alternative Approaches to Discrete Working Time Choice in an AGE Framework

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  • Arntz, Melanie
  • Boeters, Stefan
  • Gürtzgen, Nicole

Abstract

We compare two options of integrating discrete working time choice of heterogenous households into a general equilibrium model. The first, known from the literature, produces household heterogeneity through a working time preference parameter. We contrast this with a model that directly incorporates a logit discrete-choice approach into a AGE framework. On the grounds of both calibration consistency and adequate accomodation of within-household interaction, we argue that the logit approach is preferable. --

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Bibliographic Info

Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 05-62.

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Date of creation: 2005
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Handle: RePEc:zbw:zewdip:4545

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Keywords: applied general equilibrium; discrete working time choice; labour market; wage bargaining; labour market reform; logit model;

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  1. Ugo Colombino & R. Aaberge & T. Wennemo, 2006. "Evaluating Alternative Representations of the Choice Sets in Models of Labour Supply," CHILD Working Papers wp17_06, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
  2. Schnabel, Reinhold & Gürtzgen, Nicole & Boeters, Stefan, 2003. "Reforming Social Welfare in Germany: An Applied General Equilibrium Analysis," ZEW Discussion Papers 03-70, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  3. Immervoll, Herwig & Kleven, Henrik Jacobsen & Kreiner, Claus Thustrup & Saez, Emmanuel, 2005. "Welfare Reform in European Countries: A Microsimulation Analysis," IZA Discussion Papers 1810, Institute for the Study of Labor (IZA).
  4. John Hutton & Anna Ruocco, 1999. "Tax Reform and Employment in Europe," International Tax and Public Finance, Springer, vol. 6(3), pages 263-287, August.
  5. Graafland, Johan J. & de Mooij, Ruud A., 1999. "Fiscal policy and the labour market: An AGE analysis," Economic Modelling, Elsevier, vol. 16(2), pages 189-219, April.
  6. Rolf Aaberge & Ugo Colombino & Erling Holmøy & Birger Strøm & Tom Wennemo, 2004. "Population ageing and fiscal sustainability: An integrated micro-macro analysis of required tax changes," Discussion Papers 367, Research Department of Statistics Norway.
  7. Gürtzgen, Nicole & Feil, Michael & Boeters, Stefan, 2004. "Discrete Working Time Choice in an Applied General Equilibrium Model," ZEW Discussion Papers 04-20, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  8. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387, April.
  9. Boeters, Stefan & Böhringer, Christoph & Feil, Michael, 2002. "Taxation and unemployment: an applied general equilibrium approach for Germany," ZEW Discussion Papers 02-39, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  10. Richard Blundell & Thomas MaCurdy, 1998. "Labour supply: a review of alternative approaches," IFS Working Papers W98/18, Institute for Fiscal Studies.
  11. Jacobebbinghaus, Peter & Steiner, Viktor, 2003. "Reforming Social Welfare as We Know It? A Microsimulation Study for Germany," ZEW Discussion Papers 03-33, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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  14. Henrik Jacobsen Kleven & Claus Thustrup Kreiner, 2003. "The Marginal Cost of Public Funds in OECD Countries. Hours of Work Versus Labor Force Participation," CESifo Working Paper Series 935, CESifo Group Munich.
  15. A. Lans Bovenberg & Johan J. Graafland & Ruud A. de Mooij, 1998. "Tax Reform and the Dutch Labor Market: An Applied General Equilibrium Approach," NBER Working Papers 6693, National Bureau of Economic Research, Inc.
  16. Steve Nickell & Jan van Ours, 2000. "The Netherlands and the United Kingdom: a European unemployment miracle?," Economic Policy, CEPR & CES & MSH, vol. 15(30), pages 135-180, 04.
  17. Shoven, John B & Whalley, John, 1984. "Applied General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey," Journal of Economic Literature, American Economic Association, vol. 22(3), pages 1007-51, September.
  18. 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.
  19. Charles L. Ballard & Don Fullerton & John B. Shoven & John Whalley, 1985. "Introduction to "A General Equilibrium Model for Tax Policy Evaluation"," NBER Chapters, in: A General Equilibrium Model for Tax Policy Evaluation, pages 1-5 National Bureau of Economic Research, Inc.
  20. Koskela, Erkki & Vilmunen, Jouko, 1996. "Tax progression is good for employment in popular models of trade union behaviour," Labour Economics, Elsevier, vol. 3(1), pages 65-80, August.
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Cited by:
  1. Stefan Boeters & Michael Feil, 2009. "Heterogeneous Labour Markets in a Microsimulation–AGE Model: Application to Welfare Reform in Germany," Computational Economics, Society for Computational Economics, vol. 33(4), pages 305-335, May.
  2. Magnani, Riccardo & Mercenier, Jean, 2009. "On linking microsimulation and computable general equilibrium models using exact aggregation of heterogeneous discrete-choice making agents," Economic Modelling, Elsevier, vol. 26(3), pages 560-570, May.
  3. Peichl, Andreas, 2008. "The benefits of linking CGE and Microsimulation Models - Evidence from a Flat Tax analysis," FiFo Discussion Papers - Finanzwissenschaftliche Diskussionsbeiträge 08-6, University of Cologne, FiFo Institute for Public Economics.
  4. Arntz, Melanie, 2006. "What attracts human capital? Understanding the skill composition of interregional job matches in Germany," ZEW Discussion Papers 06-62, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  5. repec:ese:iserwp:2009-02 is not listed on IDEAS
  6. Melanie Arntz & Stefan Boeters & Nicole Gürtzgen & Stefanie Schubert, 2006. "Analysing Welfare Reform in a Microsimulation-AGE Model," Computing in Economics and Finance 2006 109, Society for Computational Economics.
  7. Arntz, Melanie & Boeters, Stefan & Gürtzgen, Nicole & Schubert, Stefanie, 2008. "Analysing welfare reform in a microsimulation-AGE model: The value of disaggregation," Economic Modelling, Elsevier, vol. 25(3), pages 422-439, May.
  8. Alho, Kari O. E., 2006. "Labour Market Institutions and the Effectiveness of Tax and Benefit Policies in Enchancing Employment: A General Equilibrium Analysis," Discussion Papers 1008, The Research Institute of the Finnish Economy.

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