Static Labor Supply

Topics Discussed in Class

• • Basic Model of Labor Supply.

  • Complications Due to Kinks in Budget Set.

  • Selection Bias.

  • Kinked Budget Set Estimation.

  • Notes

  • Homework 1

  • Homework 1a

Readings Discussed in Class (in order of discussion):

• • Deaton, Angus, and John Muellbauer (1980). Economics and Consumer Behavior. Cambridge University Press.

  • Heckman, James (1974). "Shadow Prices, Market Wages, and Labor Supply." Econometrica. 42(4): 679-694.

  • Heckman, James (1979). "Sample Selection Bias as a Specification Error." Econometrica. 47(1): 153-161.

  • Mroz, Thomas (1987). "The Sensitivity of an Empirical Model of Married Women's Hours of Work to Economic and Statistical Assumptions." Econometrica. 55(4): 765-799.

  • Stern, Steven (1996). "Semiparametric Estimates of the Supply and Demand Effects of Disability on Labor Force Participation." Journal of Econometrics. 71(1): 49-70.

  • Hausman, Jerry, (1981). "Labor Supply." in How Taxes Affect Economic Behavior. (eds.) H. Aaron and J. Pechman. Brookings Institution.

Extra readings

• Becker, Gary (1965). "A Theory of the Allocation of Time." Economic Journal. 75: 493-517.