Human capital and the intertemporal substitution for leisure: empirical evidence for Spain

Antonio Cutanda and Juan A. Sanchis-Llopis
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Antonio Cutanda: Universidad de Valencia, Valencia, Spain ORCID number: 0000-0003-2066-4632
Juan A. Sanchis-Llopis: Universidad de Valencia and ERICES, Valencia, Spain ORCID number: 0000-0001-9664-4668

No 2116, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: Spain. Further, we will study whether human capital accumulation affects this key elasticity. For this purpose, we estimate the equation for the intertemporal substitution without accounting for human capital and introducing it. We build a pseudo-panel data set combining the Spanish Family Expenditure Survey and the Labour Survey over the period 1987-1997. From our results the estimate of the intertemporal elasticity of leisure is about 0.25, that is comparable to estimates found for other economies. Further, considering the effect of human capital significantly increases the estimated elasticity of intertemporal substitution for leisure, obtaining an estimate about 0.5, what confirms the existence of a bias if we do not consider human capital. Finally, this bias is larger for the younger cohorts than for the older ones.

Keywords: Euler equation; Instrumental variables; Intertemporal Substitution for leisure; Panel data. (search for similar items in EconPapers)
JEL-codes: C33 C36 E24 J22 (search for similar items in EconPapers)
Date: 2022-02
New Economics Papers: this item is included in nep-eur, nep-lma and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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