Discrete Hours Labour Supply Modelling: Specification, Estimation and Simulation

John Creedy and Guyonne Kalb

No 03/20, Treasury Working Paper Series from New Zealand Treasury

Abstract: The assumption behind discrete hours labour supply modelling is that utility-maximising individuals choose from a relatively small number of hours levels, rather than being able to vary hours worked continuously. Such models are becoming widely used in view of their substantial advantages, compared with a continuous hours approach, when estimating and their role in tax policy microsimulation. This paper provides an introduction to the basic analytics of discrete hours labour supply modelling. Special attention is given to model specification, maximum likelihood estimation and microsimulation of tax reforms. The analysis is at each stage illustrated by the use of numerical examples.

Keywords: Discrete hours labour supply; multinomial logit; maximum likelihood estimation; microsimulation (search for similar items in EconPapers)
JEL-codes: C15 C25 C50 D10 (search for similar items in EconPapers)
Pages: 38
Date: 2003-09
New Economics Papers: this item is included in nep-cmp, nep-dcm and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

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https://treasury.govt.nz/sites/default/files/2018-01/twp03-20.pdf (application/pdf)

Related works:
Journal Article: Discrete Hours Labour Supply Modelling: Specification, Estimation and Simulation (2005)
Working Paper: Discrete Hours Labour Supply Modelling: Specification, Estimation and Simulation (2003)
Working Paper: Discrete Hours Labour Supply Modelling: Specification, Estimation and Simulation (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:nzt:nztwps:03/20

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