Labour Supply with Quantity Constraints: Estimates from a Large Sample of Canadian Workers

Lars Osberg and Shelley Phipps

Oxford Economic Papers, 1993, vol. 45, issue 2, 269-91

Abstract: This paper uses a new and very large data set (66,934 observations) to estimate labor-supply equations for Canadian men and women in 1986, taking account of quantity constraints on weeks of work. The authors present evidence that quantity constraints on available labor hours are a significant determinant of observed labor supply behavior. They conclude that desired labor supply is inelastic with respect to wages, lightly backward bending, and very similar for men and for women. Moreover, the authors find that quantity constraints in labor markets are a significant determinant of earnings inequality. Copyright 1993 by Royal Economic Society.

Date: 1993
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