Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192691 
Year of Publication: 
2012
Series/Report no.: 
Discussion Papers No. 709
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
This paper discusses a modeling framework in which workers are assumed to choose their preferred job from latent worker-specific choice sets. This point of departure yields a framework that formalizes the widely used ad hoc approaches (fixed cost of working and dummies at peak hours) in the literature of discrete labor supply models. We discuss the conditions under which the preferences and job opportunity restrictions can be separated using conventional data on hours and wages only. Subsequently, we show that the framework is consistent with stochastic choice sets and a relaxation of the IIA assumption. An empirical model version for married/cohabiting couples is estimated using Norwegian micro data. Based on the empirical model, we discuss further important empirical issues, such as functional form, prediction performance and simulation of counterfactual policy reforms.
Subjects: 
Labor supply
non-pecuniary job attributes
latent choice sets
random utility models.
JEL: 
J22
C51
Document Type: 
Working Paper

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