Labor supply: A review of alternative approaches

Richard Blundell () and Thomas Macurdy

Chapter 27 in Handbook of Labor Economics, 1999, vol. 3, Part A, pp 1559-1695 from Elsevier

Abstract: This chapter surveys existing approaches to modeling labor supply and identifies important gaps in the literature that could be addressed in future research. The discussion begins with a look at recent policy reforms and labor market facts that motivate the study of labor supply. The analysis then presents a unifying framework that allows alternative empirical formulations of the labor supply model to be compared and their resulting elasticities to be interpreted. This is followed by critical reviews of alternative approaches to labor-supply modeling. The first review assesses the difference-in-differences approach and its relationship to natural experiments. The second analyzes estimation with non-linear budget constraints and welfare-program participation. The third appraises developments of family labor-supply models including both the standard unitary and collective labor-supply formulations. The fourth briefly explores dynamic extensions of the labor supply model, characterizing how participation decisions, learning-by-doing, human capital accumulation and habit formation affect the analysis of the lifecycle model. At the end of each of the four broad reviews, we summarize a selection of the recent empirical findings. The concluding section asks whether the developments reviewed in this chapter place us in a better position to answer the policy-reform questions and to interpret the trends in participation and hours with which we began this review.

JEL-codes: J0 (search for similar items in EconPapers)
Date: 1999
References: Add references at CitEc
Citations: View citations in EconPapers (1357)

Downloads: (external link)
http://www.sciencedirect.com/science/article/B7P5V ... a0476c9c625f38c9411a
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Labour supply: a review of alternative approaches (1998)
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:eee:labchp:3-27

Access Statistics for this chapter

More chapters in Handbook of Labor Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().