Female labour supply in Spain: The importance of behavioural assumptions and unobserved heterogeneity specification

Jaume Garcia Villar and María J. Suárez

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: We estimate four models of female labour supply using a Spanish sample of married women from 1994, taking into account the complete form of the individual’s budget set. The models differ in the hypotheses relating to the presence of optimisation errors and/or the way non-workers contribute to the likelihood function. According to the results, the effects of wages and non-labour income on the labour supply of Spanish married women depend on the specification used. The model which has both preference and optimisation errors and allows for both voluntarily and involuntarily unemployed females desiring to participate seems to better fit the evidence for Spanish married women.

Keywords: Labour supply; taxes; unobserved heterogeneity (search for similar items in EconPapers)
JEL-codes: J22 (search for similar items in EconPapers)
Date: 2001-03
New Economics Papers: this item is included in nep-dcm and nep-lab
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