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Structural Estimation of Family Labor Supply with Taxes: Estimating a Continuous Hours Model Using a Direct Utility Specification

Structural Estimation of Family Labor Supply with Taxes: Estimating a Continuous Hours Model... Abstract: This paper proposes a new method for estimating family labor supply in the presence of taxes. This method accounts for continuous hours choices, measurement error, unobserved heterogeneity in tastes for work, the nonlinear form of the tax code, and fixed costs of work in one comprehensive specification. Estimated on data from the 2001 PSID, the resulting elasticities for married males are consistent with those found elsewhere in the literature but female wage elasticities are substantially smaller than those found in most of the literature. Simulations of recent tax acts predict small effects on the labor supply of married couples. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Human Resources University of Wisconsin Press

Structural Estimation of Family Labor Supply with Taxes: Estimating a Continuous Hours Model Using a Direct Utility Specification

Journal of Human Resources , Volume 44 (2) – Apr 4, 2009

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Publisher
University of Wisconsin Press
Copyright
Copyright © University of Wisconsin Press
ISSN
1548-8004
Publisher site
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Abstract

Abstract: This paper proposes a new method for estimating family labor supply in the presence of taxes. This method accounts for continuous hours choices, measurement error, unobserved heterogeneity in tastes for work, the nonlinear form of the tax code, and fixed costs of work in one comprehensive specification. Estimated on data from the 2001 PSID, the resulting elasticities for married males are consistent with those found elsewhere in the literature but female wage elasticities are substantially smaller than those found in most of the literature. Simulations of recent tax acts predict small effects on the labor supply of married couples.

Journal

Journal of Human ResourcesUniversity of Wisconsin Press

Published: Apr 4, 2009

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