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Desired and actual labour supply of unmarried men and women in the Netherlands

  • Euwals, Rob
  • van Soest, Arthur

Desired and actual working hours of unmarried adults are analyzed.A discrete structural neoclassical model is used to explain desired hours.Desired hours depend on gross wage rates, tax and benefit rules, other income, and some background variables.The model takes account of fixed costs of working and of prediction errors in wage rates of nonworkers.Actual hours are explained from desired hours and hours restrictions.Deviations between actual and desired hours are used to identify equations for involuntary unemployment and the lack of part-time jobs.Explanatory variables include age, education level, and the difference between potential earnings and some reference (minimum) wage.The model is estimated using cross-section data from the October 1988 wave of the Dutch Socio-Economic Panel.We find larger wage elasticities of desired hours of work for females than for males.People with potential earnings below their reference wage have a significantly larger probability of involuntary unemployment than others.Apart from involuntary unemployment, the lack of part-time jobs appears to be an important source of hours restrictions.

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File URL: http://www.sciencedirect.com/science/article/pii/S0927-5371(98)00018-9
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Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 6 (1999)
Issue (Month): 1 (March)
Pages: 95-118

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Handle: RePEc:eee:labeco:v:6:y:1999:i:1:p:95-118
Contact details of provider: Web page: http://www.elsevier.com/locate/labeco

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  1. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
  2. Melenberg, B. & Van Soest, A., 1993. "Semi-Parametric Estimation on the Sample Selection Model," Papers 9334, Tilburg - Center for Economic Research.
  3. Robert H. Meyer & David A. Wise, 1982. "The Effects of the Minimum Wage on the Employment and Earnings of Youth," NBER Working Papers 0849, National Bureau of Economic Research, Inc.
  4. Blundell, Richard & Ham, John & Meghir, Costas, 1987. "Unemployment and Female Labour Supply," Economic Journal, Royal Economic Society, vol. 97(388a), pages 44-64, Supplemen.
  5. Ilmakunnas, Seija & Pudney, Stephen, 1990. "A model of female labour supply in the presence of hours restrictions," Journal of Public Economics, Elsevier, vol. 41(2), pages 183-210, March.
  6. Dickens, William T & Lundberg, Shelly J, 1993. "Hours Restrictions and Labor Supply," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(1), pages 169-92, February.
  7. Hausman, Jerry A, 1985. "The Econometrics of Nonlinear Budget Sets," Econometrica, Econometric Society, vol. 53(6), pages 1255-82, November.
  8. Martijn P. Tummers & Isolde Woittiez, 1991. "A Simultaneous Wage and Labor Supply Model with Hours Restrictions," Journal of Human Resources, University of Wisconsin Press, vol. 26(3), pages 393-423.
  9. van Soest, A.H.O. & Kooreman, P. & Kapteyn, A.J., 1990. "Coherency and regularity of demand systems with equality and inequality constraints," Discussion Paper 1990-1, Tilburg University, Center for Economic Research.
  10. Richard Blundell & Ian Walker, 1986. "A Life-Cycle Consistent Empirical Model of Family Labour Supply Using Cross-Section Data," Review of Economic Studies, Oxford University Press, vol. 53(4), pages 539-558.
  11. Gourieroux, Christian & Monfort, Alain, 1993. "Simulation-based inference : A survey with special reference to panel data models," Journal of Econometrics, Elsevier, vol. 59(1-2), pages 5-33, September.
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