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| Publications [#28491] of Bradley T. Heim
Papers Published
- Bradley T. Heim and Bruce D. Meyer, Work Costs and Nonconvex Preferences in the Estimation of Labor Supply Models,
Journal of Public Economics, vol. 88
(2004),
pp. 2323-2338
(last updated on 2004/12/06)
Abstract:
Works costs have not been adequately handled
in labor supply estimation, likely due to
their
complexity. We show that, if work costs are
not accounted for in the budget and time
constraints in a
structural labor supply model, they will be
subsumed into the data generating
preferences. Even if
underlying preferences over consumption and
leisure are convex, the presence of
unobservable work
costs can make these preferences appear
nonconvex. However, we show that, under
plausible
conditions, policy relevant calculations,
such as estimates of the effect of tax
changes on labor supply
and deadweight loss measures, are not
affected by the fact that estimated
preferences incorporate
work costs.
Keywords:
Labor Supply • Taxation • Structural Estimation
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