Life-cycle labour supply with human capital: Evidence for Spain

Antonio Cutanda and Juan A. Sanchis Llopis
Additional contact information
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 2204, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: In this paper we provide the first estimate of the intertemporal substitution for leisure in Spain, accounting for the impact of human capital accumulation. This would allow uncovering whether the intertemporal labour supply of Spanish workers is affected by human capital. Our empirical strategy consists of estimating the equation for the intertemporal substitution of leisure with and without accounting for human capital, what allows to detect hypothetical estimation biases associated to omitting the impact of human capital. To that end, we build a pseudo-panel data set combining the Spanish Family Expenditure Survey and the Labour Survey over the period 1987-1997. While the model that ignores human capital accumulation provides an estimate of the intertemporal elasticity of substitution for leisure about 0.25, comparable to previously available estimates for Spain and other economies, the model with human capital provides an estimate about 0.5, what confirms the existence of a bias in the former estimates. 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: 2022-09
New Economics Papers: this item is included in nep-eur, nep-his and nep-lma
References: Add references at CitEc
Citations:

Downloads: (external link)
http://repecsrv.uv.es/paper/RePEc/pdf/eec_2204.pdf First version, 2204 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eec:wpaper:2204

Access Statistics for this paper

More papers in Working Papers from Department of Applied Economics II, Universidad de Valencia Contact information at EDIRC.
Bibliographic data for series maintained by Vicente Esteve ().