Structural Labour Supply Models and Microsimulation

Rolf Aaberge and Ugo Colombino

International Journal of Microsimulation, 2018, vol. 11, issue 1, 162-197

Abstract: The purpose of the paper is to provide a discussion of the various approaches for accounting for labour supply responses in microsimulation models. The paper focus attention on two methodologies for modelling labour supply: (i) the discrete choice model and (ii) the random utility – random opportunities model. The paper then describes approaches to utilising these models for policy simulation in terms of producing and interpreting simulation outcomes, outlining an extensive literature of policy analyses utilising these approaches. Labour supply models are not only central for analysing behavioural labour supply responses but also for identifying optimal tax-benefit systems, given some of the challenges of the theoretical approach. Combining labour supply results with individual and social welfare functions enables the social evaluation of policy simulations. Combining welfare functions and labour supply functions, the paper discusses how to model socially optimal income taxation

Keywords: BEHAVIOURAL MICROSIMULATION; LABOUR SUPPLY; DISCRETE CHOICE; TAX REFORMS (search for similar items in EconPapers)
JEL-codes: C50 D10 D31 H21 H24 H31 J20 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://microsimulation.org/IJM/V11_1/IJM_11_1_5.pdf (application/pdf)

Related works:
Working Paper: Structural Labour Supply Models and Microsimulation (2018)
Working Paper: Structural Labour Supply Models and Microsimulation (2018)
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:ijm:journl:v10:y:2018:i:1:p:162-197

Access Statistics for this article

International Journal of Microsimulation is currently edited by Matteo Richiardi

More articles in International Journal of Microsimulation from International Microsimulation Association
Bibliographic data for series maintained by Jinjing Li ().