The Marginal Rate of Substitution and the Specification of Labour Supply Models

Gauthier Lanot

No 922, Umeå Economic Studies from Umeå University, Department of Economics

Abstract: In this note I revisit Heckman's proposal, [Heckman, 1974], to specify a static labour supply model using a simple formulation for the Marginal Rate of Substitution between total expenditure on consumption and hours of work. I describe the analytical form of the expenditure function and I show how the direct and indirect utility functions can be recovered. I propose an alternative specification for the MRS and in this case I describe analytically the labour supply functions, the indirect and direct utility functions as well as the expenditure function.

Keywords: Labour Supply Model; Specification; Marginal Rate of Substitution (search for similar items in EconPapers)
JEL-codes: C51 D11 J22 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2016-02-17
New Economics Papers: this item is included in nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.usbe.umu.se/digitalAssets/176/176599_th ... supply-models-gl.pdf (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:hhs:umnees:0922

Access Statistics for this paper

More papers in Umeå Economic Studies from Umeå University, Department of Economics Department of Economics, Umeå University, S-901 87 Umeå, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by David Skog ().