IDEAS home Printed from https://ideas.repec.org/p/hhs/osloec/2003_011.html
   My bibliography  Save this paper

Analyzing labor supply behavior with latent job opportunity sets and institutional choice constraints

Author

Listed:
  • Dagsvik, John K.

    (Statistics Norway)

  • Strøm, Steinars

    (Dept. of Economics, University of Oslo)

Abstract

In this paper we discuss a general framework for analyzing labor supply behavior in the presence of complicated budget- and quantity constraints of which some are unobserved. The point of departure is that an individual’s labor supply decision can be considered as a choice from a set of discrete alternatives (jobs). These jobs are characterized by attributes such as hours of work, sector specific wages and other sector specific aspects of the jobs. We focus in particular on theoretical justification of functional form assumptions and properties of the random components of the model. The paper includes an empirical application based on Norwegian data, in which the labor supply of married women is estimated.

Suggested Citation

  • Dagsvik, John K. & Strøm, Steinars, 2003. "Analyzing labor supply behavior with latent job opportunity sets and institutional choice constraints," Memorandum 11/2003, Oslo University, Department of Economics.
    • Handle: RePEc:hhs:osloec:2003_011
    as

    Download full text from publisher

    File URL: http://www.sv.uio.no/econ/english/research/unpublished-works/working-papers/pdf-files/2003/Memo-11-2003.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Altonji, Joseph G & Paxson, Christina H, 1988. "Labor Supply Preferences, Hours Constraints, and Hours-Wage Trade-Offs," Journal of Labor Economics, University of Chicago Press, vol. 6(2), pages 254-276, April.
    2. Blomquist, Soren, 1996. "Estimation methods for male labor supply functions How to take account of nonlinear taxes," Journal of Econometrics, Elsevier, vol. 70(2), pages 383-405, February.
    3. Dagsvik, John K, 2000. "Aggregation in Matching Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(1), pages 27-57, February.
    4. Arrufat, Jose Luis & Zabalza, Antonio, 1986. "Female Labor Supply with Taxation, Random Preferences, and Optimization Errors," Econometrica, Econometric Society, vol. 54(1), pages 47-63, January.
    5. John K. Dagsvik & Steinar StrF8m, 2002. "Analyzing labor supply behavior with latent job opportunity sets and institutional choice constraints," ICER Working Papers 15-2002, ICER - International Centre for Economic Research.
    6. Daniel S. Hamermesh, 1986. "Incentives for the Homogenization of Time Use," International Economic Association Series, in: Bela Balassa & Herbert Giersch (ed.), Economic Incentives, chapter 5, pages 124-172, Palgrave Macmillan.
    7. Ransom, Michael R, 1987. "An Empirical Model of Discrete and Continuous Choice in Family Labor Supply," The Review of Economics and Statistics, MIT Press, vol. 69(3), pages 465-472, August.
    8. Kapteyn, Arie & Kooreman, Peter & van Soest, Arthur, 1990. "Quantity Rationing and Concavity in a Flexible Household Labor Supply Model," The Review of Economics and Statistics, MIT Press, vol. 72(1), pages 55-62, February.
    9. 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 169-192, February.
    10. 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.
    11. Edin, P-A. & Zetterberg, J., 1989. "Inter-Industry Wage Differntials: Evidence From Sweden And A Comparison Withthe United States," Papers 1989f, Uppsala - Working Paper Series.
    12. Blomquist, N. Soren, 1983. "The effect of income taxation on the labor supply of married men in Sweden," Journal of Public Economics, Elsevier, vol. 22(2), pages 169-197, November.
    13. Hausman, Jerry & Ruud, Paul, 1984. "Family Labor Supply with Taxes," American Economic Review, American Economic Association, vol. 74(2), pages 242-248, May.
    14. Daniel McFadden, 1977. "Modelling the Choice of Residential Location," Cowles Foundation Discussion Papers 477, Cowles Foundation for Research in Economics, Yale University.
    15. Nakamura, Alice & Nakamura, Masao, 1981. "A Comparison of the Labor Force Behavior of Married Women in the United States and Canada, with Special Attention to the Impact of Income Taxes," Econometrica, Econometric Society, vol. 49(2), pages 451-489, March.
    16. Hausman, Jerry A, 1985. "The Econometrics of Nonlinear Budget Sets," Econometrica, Econometric Society, vol. 53(6), pages 1255-1282, November.
    17. Kohlhase, Janet E, 1986. "Labor Supply and Housing Demand for One- and Two-Earner Households," The Review of Economics and Statistics, MIT Press, vol. 68(1), pages 48-57, February.
    18. Krueger, Alan B & Summers, Lawrence H, 1988. "Efficiency Wages and the Inter-industry Wage Structure," Econometrica, Econometric Society, vol. 56(2), pages 259-293, March.
    19. repec:bla:scandj:v:97:y:1995:i:4:p:635-59 is not listed on IDEAS
    20. Aaberge, Rolf & Colombino, Ugo & Strom, Steinar, 1999. "Labour Supply in Italy: An Empirical Analysis of Joint Household Decisions, with Taxes and Quantity Constraints," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(4), pages 403-422, July-Aug..
    21. Edin, Per-Anders & Zetterberg, Johnny, 1992. "Interindustry Wage Differentials: Evidence from Sweden and a Comparison with the United States," American Economic Review, American Economic Association, vol. 82(5), pages 1341-1349, December.
    22. Dagsvik, John K, 1994. "Discrete and Continuous Choice, Max-Stable Processes, and Independence from Irrelevant Attributes," Econometrica, Econometric Society, vol. 62(5), pages 1179-1205, September.
    23. Moffitt, Robert, 1984. "The Estimation of a Joint Wage-Hours Labor Supply Model," Journal of Labor Economics, University of Chicago Press, vol. 2(4), pages 550-566, October.
    24. Magnac, Th, 1991. "Segmented or Competitive Labor Markets," Econometrica, Econometric Society, vol. 59(1), pages 165-187, January.
    25. Rosen, Harvey S, 1976. "Taxes in a Labor Supply Model with Joint Wage-Hours Determination," Econometrica, Econometric Society, vol. 44(3), pages 485-507, May.
    26. T. J. Wales & A. D. Woodland, 1979. "Labour Supply and Progressive Taxes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 46(1), pages 83-95.
    27. Heckman, James J & Sedlacek, Guilherme L, 1990. "Self-selection and the Distribution of Hourly Wages," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 329-363, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stefan Boeters & Luc Savard, 2011. "The Labour Market in CGE Models," Cahiers de recherche 11-20, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    2. Rolf Aaberge & Ugo Colombino & Steinar Strøm, 2004. "Do more equal slices shrink the cake? An empirical investigation of tax-transfer reform proposals in Italy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 17(4), pages 767-785, December.
    3. John K. Dagsvik & Steinar StrF8m, 2002. "Analyzing labor supply behavior with latent job opportunity sets and institutional choice constraints," ICER Working Papers 15-2002, ICER - International Centre for Economic Research.
    4. Bart Capéau & André Decoster & Gijs Dekkers, 2016. "Estimating and Simulating with a Random Utility Random Opportunity Model of Job Choice Presentation and Application to Belgium," International Journal of Microsimulation, International Microsimulation Association, vol. 9(2), pages 144-191.
    5. John K. Dagsvik & Marilena Locatelli & Steinar Strøm, 2006. "Simulating labor supply behaviour when workers have preferences over job opportunities and face non-linear budget constraints," CHILD Working Papers wp01_06, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
    6. Boeters, Stefan & Savard, Luc, 2013. "The Labor Market in Computable General Equilibrium Models," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1645-1718, Elsevier.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. John K. Dagsvik & Steinar StrØm, 2006. "Sectoral labour supply, choice restrictions and functional form," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(6), pages 803-826, September.
    2. Rolf Aaberge & Ugo Colombino, 2014. "Labour Supply Models," Contributions to Economic Analysis, in: Handbook of Microsimulation Modelling, volume 127, pages 167-221, Emerald Group Publishing Limited.
    3. Rolf Aaberge & Ugo Colombino & Steinar Strøm & Tom Wennemo, 2005. "Joint Labour Supply of Married Couples: Efficiency and Distribution Effects of Tax and Labour Market Reforms," Labor and Demography 0501004, University Library of Munich, Germany.
    4. Tim Callan & A. Van Soest & John R. Walsh, 2007. "Tax Structure and Female Labour Market Participation: Evidence from Ireland," Papers WP208, Economic and Social Research Institute (ESRI).
    5. van Soest, A.H.O., 1990. "Essays on micro-econometric models of consumer demand and the labour market," Other publications TiSEM be045d62-a73d-4d7c-a591-f, Tilburg University, School of Economics and Management.
    6. John K. Dagsvik & Zhiyang Jia, 2008. "An Alternative Approach to Labor Supply Modeling. Emphasizing Job-type as Choice Variable," Discussion Papers 550, Statistics Norway, Research Department.
    7. Atallah, Gamal, 1998. "Les impôts sur le revenu et l’offre de travail des femmes mariées : une revue de la littérature," L'Actualité Economique, Société Canadienne de Science Economique, vol. 74(1), pages 95-128, mars.
    8. Tim Callan & Arthur Van Soest & John R. Walsh, 2009. "Tax Structure and Female Labour Supply: Evidence from Ireland," LABOUR, CEIS, vol. 23(1), pages 1-35, March.
    9. Bessho, Shun-ichiro & Hayashi, Masayoshi, 2011. "Labor supply response and preferences specification: Estimates for prime-age males in Japan," Journal of Asian Economics, Elsevier, vol. 22(5), pages 398-411, October.
    10. John K. Dagsvik & Zhiyang Jia & Tom Kornstad & Thor O. Thoresen, 2014. "Theoretical And Practical Arguments For Modeling Labor Supply As A Choice Among Latent Jobs," Journal of Economic Surveys, Wiley Blackwell, vol. 28(1), pages 134-151, February.
    11. Shun-ichiro Bessho & Masayoshi Hayashi, 2005. "The CES utility function, non-linear budget constraints and labor supply : results on prime-age males in Japan," Labor Economics Working Papers 21911, East Asian Bureau of Economic Research.
    12. Aaberge, R. & Colombino, U. & Strom, S. & Wennemo, T., 1998. "Evaluating alternative tax reforms in Italy with a model of joint labor supply of married couples," Structural Change and Economic Dynamics, Elsevier, vol. 9(4), pages 415-433, December.
    13. Liang, Che-Yuan, 2018. "Taxes and Household Labor Supply: Estimating Distributional Effects of Nonlinear Prices on Multidimensional Choice," Working Paper Series 2018:2, Uppsala University, Department of Economics.
    14. van Soest, A.H.O. & Das, J.W.M., 2000. "Family Labor Supply and Proposed Tax Reforms in the Netherlands," Discussion Paper 2000-20, Tilburg University, Center for Economic Research.
    15. Beffy, Magali & Blundell, Richard & Bozio, Antoine & Laroque, Guy & Tô, Maxime, 2019. "Labour supply and taxation with restricted choices," Journal of Econometrics, Elsevier, vol. 211(1), pages 16-46.
    16. van Soest, A.H.O. & Das, J.W.M., 2000. "Family Labor Supply and Proposed Tax Reforms in the Netherlands," Discussion Paper 2000-20, Tilburg University, Center for Economic Research.
    17. Callan, T. & van Soest, A.H.O., 1994. "Family labour supply and taxes in Ireland," Other publications TiSEM f58e0a56-60c1-4f81-b11b-b, Tilburg University, School of Economics and Management.
    18. Olivier Bargain, 2004. "On modeling household labor supply with taxation," DELTA Working Papers 2004-14, DELTA (Ecole normale supérieure).
    19. van Soest, Arthur & Das, Marcel & Gong, Xiaodong, 2002. "A structural labour supply model with flexible preferences," Journal of Econometrics, Elsevier, vol. 107(1-2), pages 345-374, March.
    20. Blundell, Richard & Macurdy, Thomas, 1999. "Labor supply: A review of alternative approaches," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695, Elsevier.

    More about this item

    Keywords

    Labor supply; non-convex budget sets; non-pecuniary job-attributes; sector-specific wages;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:osloec:2003_011. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mari Strønstad Øverås (email available below). General contact details of provider: https://edirc.repec.org/data/souiono.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.