Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/20754
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dc.contributor.authorBargain, Olivieren_US
dc.date.accessioned2009-01-28T16:16:30Z-
dc.date.available2009-01-28T16:16:30Z-
dc.date.issued2005en_US
dc.identifier.urihttp://hdl.handle.net/10419/20754-
dc.description.abstractDiscrete-choice models provide a simple way of representing utility-maximizing labor supplydecisions in the presence of highly nonlinear and possibly non-convex budget constraints.Thus, it is not surprising that they are so extensively used for ex-ante evaluation of taxbenefitreforms. The question asked in this paper is whether it is possible and desirable to getstill more flexibility by relaxing some of the usual constraints imposed on householdpreferences and rationality. We first suggest a model which attains flexibility by makingparameters vary freely across hours choices. By embedding the traditional structuralapproach in this specification, it is shown that the restrictions on underlying well-behavedleisure-consumption preferences are rejected. More fundamentally still, the standardapproach, i.e., the assumption of unitary households optimizing statically, is strongly rejectedwhen tested against a general model with price- and income-dependent preferences. In astatic environment, the result boils down to a rejection of the unitary model. Interestingly,restrictions from both structural and standard models also imply important discrepancies inestimated elasticities and simulated predictions of responses to a tax reform. In particular,large differences appear between standard models and the general model which possiblyencompasses several interpretations including dynamic aspects and intrahouseholdnegotiation. These findings illustrate the difficulty to conduct policy analysis in a way whichreconciles the best explanatory power and a framework consistent with economic theory. Thegeneral model we suggest may provide future research with an interesting setting to testsome of the dimensions of household behavior.en_US
dc.language.isoengen_US
dc.publisher|aInstitute for the Study of Labor (IZA) |cBonnen_US
dc.relation.ispartofseries|aIZA Discussion paper series |x1455en_US
dc.subject.jelH31en_US
dc.subject.jelC52en_US
dc.subject.jelJ22en_US
dc.subject.jelC25en_US
dc.subject.ddc330en_US
dc.subject.keywordmultinomial logiten_US
dc.subject.keywordhousehold labor supplyen_US
dc.subject.keywordtaxationen_US
dc.subject.keywordmicrosimulationen_US
dc.subject.keywordunitary modelen_US
dc.subject.keywordcollective modelen_US
dc.subject.stwArbeitsangeboten_US
dc.subject.stwHaushaltsökonomiken_US
dc.subject.stwDiskrete Entscheidungen_US
dc.subject.stwFamilienbesteuerungen_US
dc.subject.stwSchätzungen_US
dc.subject.stwTheorieen_US
dc.subject.stwFrankreichen_US
dc.titleOn Modeling Household Labor Supply with Taxationen_US
dc.typeWorking Paperen_US
dc.identifier.ppn478331401en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-

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