Household Labor Supply and Welfare Participation in Sweden

Lennart Flood, Jorgen Hansen and Roger Wahlberg ()
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Roger Wahlberg: Department of Economics, School of Economics and Commercial Law, Göteborg University

No 18, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: Using a sample of Swedish households, we estimate a household labor supply model assuming that preferences for consumption and leisure can be described by a direct translog utility function. The labor supply and welfare participation decisions are treated as a discrete choice problem, and we assume that these choices follow a simple conditional logit rule. In addition, we allow unobserved individual- specific effects to be correlated across alternatives. We assume that these unobserved effects are drawn from a discrete distribution, and the correlation across alternatives is modeled using factor-loading techniques. Classification error in hours is allowed for by using a multiplicative measurement error specification. The estimates from the structural model yield inelastic labor supply among husbands and positive wage elasticity for wives. Further, the cross elasticities are close to zero.

Keywords: Labor Supply; Welfare Participation; Unobserved Heterogeneity; Factor Loading; Tax Simulation. (search for similar items in EconPapers)
JEL-codes: J22 (search for similar items in EconPapers)
Pages: 27 pages
Date: 1999-11-28
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (28)

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Related works:
Journal Article: Household Labor Supply and Welfare Participation in Sweden (2004)
Working Paper: Household Labour Supply and Welfare Participation in Sweden (2003)
Working Paper: Household Labor Supply and Welfare Participation in Sweden (2003)
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