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Female labour supply and income taxation in Spain: The importance of behavioural assumptions and unobserved heterogeneity specification

Author

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  • Jaume García

    (Universitat Pompeu Fabra)

  • María José Suárez

    (Universidad de Oviedo)

Abstract

We estimate four models of female labour supply using a Spanish sample of married women from 1994, taking into account the complete form of the individual’s budget set. The models differ in the hypotheses relating to the presence of optimisation errors and/or the way non-workers contribute to the likelihood function. According to the results, the effects of wages and non-labour income on the labour supply of Spanish married women depend on the specification used. The model which has both preference and optimisation errors and allows for both voluntarily and involuntarily unemployed females desiring to participate seems to better fit the evidence for Spanish married women. Classification-JEL : J22

Suggested Citation

  • Jaume García & María José Suárez, 2003. "Female labour supply and income taxation in Spain: The importance of behavioural assumptions and unobserved heterogeneity specification," Hacienda Pública Española / Review of Public Economics, IEF, vol. 164(1), pages 9-27, march.
    • Handle: RePEc:hpe:journl:y:2003:v:164:i:1:p:9-27
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    labour supply; optimization errors; budget set.;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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