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A Multi-state model of state dependence in labor supply: Intertemporal labor supply effects of a shift from joint to individual taxation


  • Haan, Peter


In this paper I develop an intertemporal discrete choice model of female labor supply to analyze the effects of true state dependence and its effect on labor supply behavior over time. The estimation results show that state dependence is significantly positive at the extensive margin and lower but in general still significant at the intensive margin. I apply this model to study the short and long run labor supply effects of a fundamental reform of the German income tax system, i.e. the shift from joint to individual taxation of married couples and show that labor supply responses are significantly higher in the long run than in the short run.

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  • Haan, Peter, 2010. "A Multi-state model of state dependence in labor supply: Intertemporal labor supply effects of a shift from joint to individual taxation," Labour Economics, Elsevier, vol. 17(2), pages 323-335, April.
  • Handle: RePEc:eee:labeco:v:17:y:2010:i:2:p:323-335

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    References listed on IDEAS

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    Cited by:

    1. André de Palma & Nathalie Picard & Ignacio Inoa, 2014. "Discrete choice decision-making with multiple decision-makers within the household," Chapters,in: Handbook of Choice Modelling, chapter 16, pages 363-382 Edward Elgar Publishing.
    2. Alexander Mosthaf & Thorsten Schank & Claus Schnabel, 2014. "Low-wage employment versus unemployment: Which one provides better prospects for women?," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-17, December.
    3. Peter Haan & Arne Uhlendorff, 2013. "Intertemporal labor supply and involuntary unemployment," Empirical Economics, Springer, vol. 44(2), pages 661-683, April.
    4. Zucchelli, E. & Harris, M. & Zhao, X., 2012. "Ill-health and transitions to part-time work and self-employment among older workers," Health, Econometrics and Data Group (HEDG) Working Papers 12/04, HEDG, c/o Department of Economics, University of York.
    5. Peter Haan & Daniel Kemptner & Arne Uhlendorff, 2015. "Bayesian procedures as a numerical tool for the estimation of an intertemporal discrete choice model," Empirical Economics, Springer, vol. 49(3), pages 1123-1141, November.
    6. repec:bla:obuest:v:79:y:2017:i:5:p:769-796 is not listed on IDEAS
    7. Yi, DongGyu, 2014. "Three studies on environmental valuation," ISU General Staff Papers 201401010800005065, Iowa State University, Department of Economics.
    8. Kalíšková, Klára, 2014. "Labor supply consequences of family taxation: Evidence from the Czech Republic," Labour Economics, Elsevier, vol. 30(C), pages 234-244.
    9. Caliendo, Marco & Künn, Steffen & Uhlendorff, Arne, 2016. "Earnings exemptions for unemployed workers: The relationship between marginal employment, unemployment duration and job quality," Labour Economics, Elsevier, vol. 42(C), pages 177-193.
    10. Harris, M.N. & Zhao, X. & Zucchelli, E., 2016. "The dynamics of health and labour market transitions at older ages: evidence from a multi-state model," Health, Econometrics and Data Group (HEDG) Working Papers 16/30, HEDG, c/o Department of Economics, University of York.
    11. Zhiyang Jia & Trine E. Vattø, 2016. "The path of labor supply adjustment. Sources of lagged responses to tax-benefit reforms," Discussion Papers 854, Statistics Norway, Research Department.


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