Improving the Modelling of Couples' Labour Supply

Robert Breunig; Deborah Cobb-Clark; Xiaodong Gong

doi:10.1111/j.1475-4932.2008.00511.x

Improving the Modelling of Couples' Labour Supply

Robert Breunig, Deborah Cobb-Clark, Xiaodong Gong

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Abstract

We study work hours of Australian couples using a structural labour-supply model. We introduce model improvements which allow error in wage estimation and unobserved influences on partners'non-market time to be correlated with one another and with own wage. This more realistic model produces wage elasticities - 0.26 (men) and 0.50 (women) - twice as large as those found without these innovations. Australian Government changes to the tax and transfer system between 2004 and 2006 are predicted to have little impact on participation and labour supply. Average weekly family income is predicted to increase by $65 per week.

Original language	English
Pages (from-to)	466-485
Journal	Economic Record
Volume	84
Issue number	267
DOIs	https://doi.org/10.1111/j.1475-4932.2008.00511.x
Publication status	Published - 2008

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10.1111/j.1475-4932.2008.00511.x

http://hdl.handle.net/1885/32296

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title = "Improving the Modelling of Couples' Labour Supply",

abstract = "We study work hours of Australian couples using a structural labour-supply model. We introduce model improvements which allow error in wage estimation and unobserved influences on partners'non-market time to be correlated with one another and with own wage. This more realistic model produces wage elasticities - 0.26 (men) and 0.50 (women) - twice as large as those found without these innovations. Australian Government changes to the tax and transfer system between 2004 and 2006 are predicted to have little impact on participation and labour supply. Average weekly family income is predicted to increase by $65 per week.",

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AB - We study work hours of Australian couples using a structural labour-supply model. We introduce model improvements which allow error in wage estimation and unobserved influences on partners'non-market time to be correlated with one another and with own wage. This more realistic model produces wage elasticities - 0.26 (men) and 0.50 (women) - twice as large as those found without these innovations. Australian Government changes to the tax and transfer system between 2004 and 2006 are predicted to have little impact on participation and labour supply. Average weekly family income is predicted to increase by $65 per week.

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DO - 10.1111/j.1475-4932.2008.00511.x

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EP - 485

JO - Economic Record

JF - Economic Record

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Improving the Modelling of Couples' Labour Supply

Abstract

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