Skip to content

EUROMOD Working Paper Series EM5/11

Welfare, labor supply and heterogeneous preferences: evidence for Europe and the US

Authors

Publication date

21 Dec 2011

Abstract

Following the report of the Stiglitz Commission, measuring and comparing well-being
across countries has gained renewed interest. Yet, analyses that go beyond
income and incorporate non-market dimensions of welfare most often rely on the
assumption of identical preferences to avoid the difficulties related to
interpersonal comparisons. In this paper, we suggest an international
comparison based on individual welfare rankings that fully retain preference heterogeneity.
Focusing on the consumption-leisure trade-off, we estimate discrete choice labor
supply models using harmonized microdata for 11 European countries and the US.
We retrieve preference heterogeneity within and across countries and analyze
several welfare criteria which take into account that differences in income are
partly due to differences in tastes. The resulting welfare rankings clearly
depend on the normative treatment of preference heterogeneity with alternative
metrics. We show that these differences can indeed be explained by estimated
preference heterogeneity across countries – rather than demographic composition

Subjects

Labour Economics, Well Being, and Microsimulation

Paper download  


Related publications

  1. Welfare, labor supply and heterogeneous preferences: evidence for Europe and the US

    Olivier Bargain, André Decoster, Mathias Dolls, et al.

    1. Labour Economics
    2. Welfare Benefits
    3. Microsimulation
  2. Welfare, labor supply and heterogeneous preferences: evidence for Europe and the US

    Olivier Bargain, André Decoster, Mathias Dolls, et al.

    1. Labour Economics
    2. Well Being
    3. Microsimulation

#520398


Research home

Research home

News

Latest findings, new research

Publications search

Search all research by subject and author

Podcasts

Researchers discuss their findings and what they mean for society

Projects

Background and context, methods and data, aims and outputs

Events

Conferences, seminars and workshops

Survey methodology

Specialist research, practice and study

Taking the long view

ISER's annual report

Themes

Key research themes and areas of interest