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Improving the Modelling of Couples' Labour Supply

Breunig, Robert; Cobb-Clark, Deborah; Gong, Xiaodong

Description

We study work hours of Australian couples using a structural labour-supply model. We introduce model improvements which allow error in wage estimation and unobserved influences on partners'non-market time to be correlated with one another and with own wage. This more realistic model produces wage elasticities - 0.26 (men) and 0.50 (women) - twice as large as those found without these innovations. Australian Government changes to the tax and transfer system between 2004 and 2006 are predicted to...[Show more]

CollectionsANU Research Publications
Date published: 2008
Type: Journal article
URI: http://hdl.handle.net/1885/32296
Source: The Economic Record
DOI: 10.1111/j.1475-4932.2008.00511.x

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