Improving the Modelling of Couples’ Labour Supply*

Breunig, Robert; Cobb‐Clark, Deborah A.; Gong, Xiaodong

doi:10.1111/j.1475-4932.2008.00511.x

Cited by 21 publications

(20 citation statements)

References 27 publications

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“…Aaberge et al (1995) and follow-ups estimate labor supply on a random choice set based upon draws from hours and wage distributions they estimate simultaneously. Breunig et al (2008) and Blundell and Shephard (2012) assume a fixed individual-specific wage rate but allow one specific preference parameter to be correlated with the error term of the wage equation. Although this accounts for at least some interaction between preferences and wages, it still assumes that the labor supply decision is exogenous to the wage rate.…”

Section: Joint Estimation Of Wages and Preferencesmentioning

confidence: 99%

Structural Labor Supply Models and Wage Exogeneity

Löffler¹,

Peichl

Siegloch

2014

SSRN Journal

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Abstract. There is still considerable dispute about the magnitude of labor supply elasticities. While differences in micro and macro estimates are recently attributed to frictions and adjustment costs, we show that relatively low labor supply elasticities derived from microeconometric models can also be explained by modeling assumptions with respect to wages. Specifically, we estimate 3,456 structural labor supply models each representing a plausible combination of frequently made choices. While most model assumptions do not systematically affect labor supply elasticities, our analysis shows that the results are very sensitive to the treatment of wages. In particular, the often-made but highly restrictive independence assumption between preferences and wages is key. To overcome this restriction, we propose a flexible estimation strategy that nests commonly used models. We show that loosening the exogeneity assumption leads to labor supply elasticities that are much higher. Structural Labor SupplyJEL Classification: C25, C52, H31, J22

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Section: Joint Estimation Of Wages and Preferencesmentioning

confidence: 99%

Structural Labor Supply Models and Wage Exogeneity

Löffler¹,

Peichl

Siegloch

2014

SSRN Journal

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“…The explanatory variables include age and its square, a set of education dummy variables, country of birth and family characteristics at the age of 14. Estimates of the wage equations correspond to typical estimates from the Australian literature (see for example Breunig et al. , 2008) and are available from the authors upon request.…”

Section: Datamentioning

confidence: 99%

Partnered Women's Labour Supply and Child‐Care Costs in Australia: Measurement Error and the Child‐Care Price*

Breunig

Gong

King³

2012

Economic Record

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We show that measurement error in the constructed price of child‐care can explain why previous Australian studies have found partnered women's labour supply to be unresponsive to child‐care prices. Through improved data and improved construction of the child‐care price variable, we find child‐care price elasticities that are statistically significant, negative and in line with elasticities found in other developed countries.

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“…Nevertheless, this effect is believed to be small and secondary, and of short term. Most of the empirical literature finds that the cross‐wage effect is indeed very small (see Breunig et al. , 2008 for an example of Australian estimates and Blau & Kahn, 2007 for US estimates).…”

Section: Regression Analysismentioning

confidence: 99%

The Added Worker Effect for Married Women in Australia*

Gong¹

2011

Economic Record

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This article investigates the labour supply responses of married women in Australia to their partners’ involuntary job loss. We study women’s labour market activities in the periods before and after their partners’ job loss. We find a significant added worker effect (AddWE) in terms of increased full‐time employment and working hours. The findings also suggest that it is harder for the female partners of men who have recently lost jobs to enter the labour market than it is for those already working to increase their working hours to compensate for lost income incurred by their partners’ job loss. The effect is persistent; one year after the partners’ job loss, women would still like to work more hours than they actually work. These findings suggest that marriage plays a risk‐sharing role through the AddWE in Australia.

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Improving the Modelling of Couples’ Labour Supply*

Cited by 21 publications

References 27 publications

Structural Labor Supply Models and Wage Exogeneity

Structural Labor Supply Models and Wage Exogeneity

Partnered Women's Labour Supply and Child‐Care Costs in Australia: Measurement Error and the Child‐Care Price*

The Added Worker Effect for Married Women in Australia*

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