Labor Supply as a Choice Among Latent Jobs: Unobserved Heterogeneity and Identification

John K. Dagsvik and Zhiyang Jia

Journal of Applied Econometrics, 2016, vol. 31, issue 3, 487-506

Abstract: This paper discusses aspects of a modeling framework in which the notion of job choice is fundamental. In this framework, workers are assumed to have preferences over latent job opportunities belonging to worker‐specific choice sets from which they choose their preferred job. The main contribution of this paper is an analysis of the identification problem under various conditions, when conventional cross‐section micro‐data are applied. The modeling framework is applied to analyze labor supply behavior for married/cohabiting couples using Norwegian micro data. Based on the empirical model, we discuss further qualitative properties of the model and simulation of counterfactual policy reforms. Copyright © 2015 John Wiley & Sons, Ltd.

Date: 2016
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Working Paper: Labor Supply as a Choice among Latent Jobs: Unobserved Heterogeneity and Identification (2014)
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