Intertemporal substitution and household production in labour supply

Publication type

Research Paper

Series Number

234

Series

Bank of England Working Paper Series

Authors

Publication date

June 1, 2004

Abstract:

The demands on a person's time vary over their working life, so that the years in which they might be expected to devote most time to work may also be the period when other commitments, such as bringing up children, are most pressing. Estimates of the intertemporal labour supply elasticity that do not take this possibility into account are likely to be biased. Recent research that uses US data from three time-use surveys has found evidence for a large downward bias to the labour supply elasticity. This paper uses a large UK survey to test this hypothesis. It finds convincing evidence for a similar downward bias in estimates of the UK labour supply elasticity for males. The analysis is extended by differentiating by sex, marital status, skill and business cycle. The bias appears in every case, but is less evident for married men. The labour supply elasticity for single women is, interestingly, similar to that for single men.

Subjects

Link

- http://www.bankofengland.co.uk/publications/workingpapers/index.htm

Notes

working paper

#507980

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