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Nonparametric Estimation of Labor Supply Functions Generated by Piece Wise Linear Budget Constraints

Sören Blomquist and Whitney Newey

Working Papers from Uppsala - Working Paper Series

Abstract: The basic idea in this paper is that labor supply can be viewed as a function of the entire budget set, so that one way to account non-parametrically for a nonlinear budget set is to estimate a nonparametric regression where the variable in the regression is the budget set. In the special case of a linear budget constraint, this estimator would be the same as nonparametric regression on wage and nonlabor income. Nonlinear budget sets will in general be charac-terized by many variables. An important part of the estimation method is a procedure to reduce the dimensionality of the regression problem.

Keywords: EVALUATION; LABOUR MARKET; SUPPLY; TAX REFORM (search for similar items in EconPapers)
JEL-codes: C14 J22 H24 (search for similar items in EconPapers)
Date: 1997
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