Paper #542

Title:

Female labour supply in Spain: The importance of behavioural assumptions and unobserved heterogeneity specification

Authors:

Jaume Garcia and María J. Suárez

Date:

March 2001

Abstract:

We estimate four models of female labour supply using a Spanish sample of married women from 1994, taking into account the complete form of the individual’s budget set. The models differ in the hypotheses relating to the presence of optimisation errors and/or the way non-workers contribute to the likelihood function. According to the results, the effects of wages and non-labour income on the labour supply of Spanish married women depend on the specification used. The model which has both preference and optimisation errors and allows for both voluntarily and involuntarily unemployed females desiring to participate seems to better fit the evidence for Spanish married women.

Keywords:

Labour supply, taxes, unobserved heterogeneity

JEL codes:

J22

Area of Research:

Labour, Public, Development and Health Economics

Published in:

Hacienda Pública Española, vol. 164, p. 9-27, 2003
With the title:
Female labour Supply and Income Taxation in Spain: The importance of behavioural assumptions and unobserved heterogeneity specification

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