Labour Supply Status and Intertemporal Behaviour: Evidence from Spanish panel data

Antonio Cutanda and Juan A. Sanchis
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Antonio Cutanda: Universidad de Valencia, Valencia, Spain
Juan A. Sanchis: Universidad de Valencia and ERICES, Valencia, Spain

No 2408, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: In this paper, we estimate the intertemporal substitution for consumption and leisure in Spain. We use the standard intertemporal optimisation consumption model with an intratemporally separable utility function, using different population groups: employees, self-employed, unemployed or retired people. Further, we analyse if the elasticity of intratemporal substitution for leisure is affected by the individual labour status (temporary workers vs fixed-term contract workers). For this purpose, we use the panel of the Spanish Survey on Household Finances (Encuesta Financiera de las Familias, SHF), covering the period 2002- 2017. The results we obtain confirm that both intertemporal substitution elasticities for consumption and leisure are different depending on individuals’ labour status and the labour contract’s characteristics, such as the duration of the contract (temporary versus fixed-term) or the degree of uncertainty about the future.

Keywords: Euler Equation; Instrumental variables; Intertemporal Substitution for consumption and leisure; Panel data (search for similar items in EconPapers)
JEL-codes: C23 C26 D12 D15 J22 (search for similar items in EconPapers)
Date: 2024-09
New Economics Papers: this item is included in nep-eur, nep-lma and nep-upt
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