Testing Intertemporal Substitution, Implicit Contracts, and Hours Restriction Models of the Labor Market Using Micro Data

Ham, John C.; Reilly, Kevin T.

doi:10.1257/00028280260344524

Cited by 62 publications

(42 citation statements)

References 63 publications

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“…Just as there are many reasons that my point estimates of the elasticity of employment 13 I also estimate the elasticity of labor supply by drawing six consecutive weeks of data for each village, because consecutive weeks is more closely analogous to the concept measured in cross sectional data. The elasticities from estimates using cross sectional data are 0.39 (without covariates) and 0.37 (with covariates).…”

Section: Gendermentioning

confidence: 99%

Kwacha Gonna Do? Experimental Evidence about Labor Supply in Rural Malawi

Goldberg

2016

American Economic Journal: Applied Economics

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I use panel data from a unique field experiment to estimate the wage elasticity of working in the day labor market in rural Malawi. Once a week for 12 consecutive weeks, I make job offers to a pre-defined sample of 529 adults. The wage varies each week, ranging from MK 30 ($US 0.21) to MK 140 ($US 1.00) for a day's work. This approach provides exogenous variation in wages, allows me to observe the full distribution of wage offers rather than the censored distribution of accepted wages, and permits the inclusion of time and village or time and individual fixed effects. I estimate that the elasticity of employment is between 0.15 and 0.17, with no significant differences between men and women. I use auxiliary data from a nationally representative survey to confirm that equal elasticities for men and women is typical of the Malawian labor market during the agricultural off-season, the time of year when my experiment takes place. I collapse my data into a censored cross section that mimics data used in the previous literature to demonstrate that my low point estimates of the elasticity employment are due to my improved identification strategy, rather than reflecting inherent differences between Malawi and other developing countries. My results reject backward-bending labor supply curves for men or women, and suggest that labor supply is highly inflexible along the relevant margin in poor, rural markets. JEL Codes: O12, J22, J43. * 3115 G Tydings Hall,

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Section: Gendermentioning

confidence: 99%

Kwacha Gonna Do? Experimental Evidence about Labor Supply in Rural Malawi

Goldberg

2016

American Economic Journal: Applied Economics

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“…The predictions of the model are assessed by comparing the generated standard deviations and cross-correlations between output and the other variables with corresponding statistics from US data. 36 Par- 34 The estimates of interest are robust to di¤erent estimation methods (eg. Hildreth-Lu and maximum likelihood grid search procedures).…”

Section: Model Vs Datamentioning

confidence: 99%

Implicit contracts and the cyclicality of the skill-premium

Pourpourides

2011

Journal of Economic Dynamics and Control

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This working paper is produced for discussion purpose only. These working papers are expected to be published in due course, in revised form, and should not be quoted or cited without the author's written permission. The feature of capital-skill complementarity coupled with variable capital utilization rates does not come at odds with the acyclical behavior of the skill-premium. The paper argues that the skill-complementarity of capital is not a quantitatively signi…cant factor at high frequencies. The key aspects are the contracts and the capital utilization margin. Terms of use: Documents in JEL Classi…cation Codes: E13, E24, E32

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“…Controlling for productivity growth, the response of hours worked to wage changes and income shocks is milder than predicted by traditional theories. For example, Ham and Reilly (2002) point to this shortcoming of the theoretical literature.…”

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confidence: 99%

A Life-Cycle Model of Habitual Dependence in Leisure Demand

Gurdgiev

2004

SSRN Journal

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Abstract.This model proposes an extension of the traditional habits in consumption literature to encompass the time-persistence of leisure demand. The model establishes a link between the habitual leisure and income effects, which amplifies the traditional effects on savings, investment and consumption distribution across periods. The disutility of habits stock varies with the strength of habit formation. At the same time, the wage elasticity of demand for leisure and the income elasticity of consumption are shown to be functions of the strength of habit formation. The model concludes that while habitual leisure captures the effects of persistence in leisure, it fails to reflect the time dependency properties of consumption. This warrants a new approach to modelling consumption and leisure demand that includes the possibility for time dependent and weakly inseparable consumption and leisure.

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Testing Intertemporal Substitution, Implicit Contracts, and Hours Restriction Models of the Labor Market Using Micro Data

Cited by 62 publications

References 63 publications

Kwacha Gonna Do? Experimental Evidence about Labor Supply in Rural Malawi

Kwacha Gonna Do? Experimental Evidence about Labor Supply in Rural Malawi

Implicit contracts and the cyclicality of the skill-premium

A Life-Cycle Model of Habitual Dependence in Leisure Demand

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