EconStor >
Forschungsinstitut zur Zukunft der Arbeit (IZA), Bonn >
IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA) >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/20754
  

Full metadata record

DC FieldValueLanguage
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 supply decisions 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 taxbenefit reforms. The question asked in this paper is whether it is possible and desirable to get still more flexibility by relaxing some of the usual constraints imposed on household preferences and rationality. We first suggest a model which attains flexibility by making parameters vary freely across hours choices. By embedding the traditional structural approach in this specification, it is shown that the restrictions on underlying well-behaved leisure-consumption preferences are rejected. More fundamentally still, the standard approach, i.e., the assumption of unitary households optimizing statically, is strongly rejected when tested against a general model with price- and income-dependent preferences. In a static environment, the result boils down to a rejection of the unitary model. Interestingly, restrictions from both structural and standard models also imply important discrepancies in estimated elasticities and simulated predictions of responses to a tax reform. In particular, large differences appear between standard models and the general model which possibly encompasses several interpretations including dynamic aspects and intrahousehold negotiation. These findings illustrate the difficulty to conduct policy analysis in a way which reconciles the best explanatory power and a framework consistent with economic theory. The general model we suggest may provide future research with an interesting setting to test some of the dimensions of household behavior.en_US
dc.language.isoengen_US
dc.publisheren_US
dc.relation.ispartofseriesIZA Discussion paper series 1455en_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-
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

Files in This Item:
File Description SizeFormat
dp1455.pdf552.78 kBAdobe PDF
No. of Downloads: Counter Stats
Show simple item record
Download bibliographical data as: BibTeX

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.