Household Labor Supply and Welfare Participation in Sweden
Using a sample of Swedish households, we estimate a household labor supply model assuming that preferences for consumption and leisure can be described by a direct translog utility function. The labor supply and welfare participation decisions are treated as a discrete choice problem, and we assume that these choices follow a simple conditional logit rule. In addition, we allow unobserved individual- specific effects to be correlated across alternatives. We assume that these unobserved effects are drawn from a discrete distribution, and the correlation across alternatives is modeled using factor-loading techniques. Classification error in hours is allowed for by using a multiplicative measurement error specification. The estimates from the structural model yield inelastic labor supply among husbands and positive wage elasticity for wives. Further, the cross elasticities are close to zero.
|Date of creation:||28 Nov 1999|
|Date of revision:|
|Contact details of provider:|| Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden|
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
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