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Theory of Individual Labour Supply Decisions, Selected Applications and Extensions of the Basic Model


  • Dagmar Brožová


The article deals with a subject s decisions about his individual labour supply. It explains the development of this problem from the cardinalistic point of view, characteristic for marginalistic economists, concerning ordinalistic decision-making between consumption and free time. The gist of this contribution is extending the basic neo-classical model in the sense of analysing selected application cases. Considered to be one of the most important applications of this model, household decision-making about labour supply has been analysed. Shared childcare and running the household as a unit influences the labour supply of the family members.

Suggested Citation

  • Dagmar Brožová, 2008. "Theory of Individual Labour Supply Decisions, Selected Applications and Extensions of the Basic Model," Acta Oeconomica Pragensia, University of Economics, Prague, vol. 2008(4), pages 56-69.
  • Handle: RePEc:prg:jnlaop:v:2008:y:2008:i:4:id:132:p:56-69

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    References listed on IDEAS

    1. Vladislav Flek & Lenka Marková & Jiøí Podpiera, 2003. "Sectoral Productivity and Real Exchange Rate Appreciation: Much Ado about Nothing?," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 53(3-4), pages 130-153, March.
    2. Taylor, Alan M, 2001. "Potential Pitfalls for the Purchasing-Power-Parity Puzzle? Sampling and Specification Biases in Mean-Reversion Tests of the Law of One Price," Econometrica, Econometric Society, vol. 69(2), pages 473-498, March.
    3. Goldberg, Pinelopi K. & Verboven, Frank, 2005. "Market integration and convergence to the Law of One Price: evidence from the European car market," Journal of International Economics, Elsevier, vol. 65(1), pages 49-73, January.
    4. Craig S. Hakkio, 1992. "Is purchasing power parity a useful guide to the dollar?," Economic Review, Federal Reserve Bank of Kansas City, issue Q III, pages 37-51.
    5. Alan M. Taylor & Mark P. Taylor, 2004. "The Purchasing Power Parity Debate," Journal of Economic Perspectives, American Economic Association, vol. 18(4), pages 135-158, Fall.
    6. Tomas Holub & Martin Cihak, 2003. "Price Convergence: What Can the Balassa-Samuelson Model Tell Us?," Working Papers 2003/08, Czech National Bank, Research Department.
    7. Martin Èihák & Tomáš Holub, 2003. "Price Convergence: What Can the Balassa-Samuelson Model Tell Us? (in English)," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 53(7-8), pages 334-355, July.
    8. Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, vol. 72, pages 584-584.
    9. Alan M. Taylor, 2002. "A Century Of Purchasing-Power Parity," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 139-150, February.
    10. Charles Engel & James Morley, 2000. "The Adjustment of Prices and the Adjustment of the Exchange Rate," Working Papers 0009, University of Washington, Department of Economics.
    11. William D. Nordhaus, 1975. "The Political Business Cycle," Review of Economic Studies, Oxford University Press, vol. 42(2), pages 169-190.
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    More about this item


    disutility of labour; indifference analysis; reservation wage; household decisions;

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply


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