Utilizing Two Types of Survey Data to Enhance the Accuracy of Labor Supply Elasticity Estimation

Cheng Chou () and Ruoyao Shi ()
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Cheng Chou: University of Leicester

No 202018, Working Papers from University of California at Riverside, Department of Economics

Abstract: We argue that despite its nonclassical measurement errors, the hours worked in the Current Population Survey (CPS) can still be utilized to enhance the overall accuracy of the estimator of the labor supply parameters based on the American Time Use Survey (ATUS), if done properly. We propose such an estimator that is a weighted average between the two stage least squares estimator based on the CPS and a non-standard estimator based on the ATUS.

Keywords: labor supply elasticity; averaging estimator; bias-variance trade-off; measurement error (search for similar items in EconPapers)
JEL-codes: C13 C21 C26 C52 C81 J22 (search for similar items in EconPapers)
Pages: 8 Pages
Date: 2020-07
New Economics Papers: this item is included in nep-ecm
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