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Estimating the Extensive Margin of Youth Labor Supply

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  • Shota Araki

Abstract

This study aims to estimate parameters of the youth labor force participation model and the responsiveness of the extensive margin of labor supply to wage. The formulation of our model includes a simultaneously on household income and labor force participation. The contribution of this study is obtaining the parameter estimates free from the bias arising from the endogeneity of the household income. The main findings in this study are following. First, under the assumption that the household income is exogenous, the effect of the wage estimate is upward biased. Second, the wage elasticity of extensive margin of youth labor force participation is 0.06. Third the extensive margin of female is higher than male. Fourth, the lower educated parsons' extensive margin is higher.

Suggested Citation

  • Shota Araki, 2013. "Estimating the Extensive Margin of Youth Labor Supply," Global COE Hi-Stat Discussion Paper Series gd12-294, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hst:ghsdps:gd12-294
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