Journal of Labor Economics Vol. 2 No. 4 1984
The Estimation of a Joint Wage-Hours Labor Supply Model
Abstract
In this paper the standard cross-sectional static model of labor supply is modified to make the wage endogenous, and a joint wage-hours model is estimated. The econometric technique addresses the non-linearity of the budget constraint by approximating the constraint by a series of discrete points. The results show that the budget constraint is indeed nonlinear, that hours affect the wage quadratically, that true wage elasticities are lower as a result, and that the model fits the hours distribution much better than the standard Tobit model.
- DOI
- 10.1086/298047
- Volume
- 2
- Issue
- 4
- Pages
- 550-566
- Language
- en
- Sources
- openalex crossref