Flexible Labor Supply Models
9 Pages Posted: 21 Jul 2009
Discrete-choice models of labor supply have become very popular for ex ante evaluations of policy reforms as they easily account for non-convex budget sets. We test the constraints imposed in practice on these models and suggest a fully flexible model that significantly improves fit.
Keywords: multinomial logit, labor supply, taxation
JEL Classification: H31, J22
Suggested Citation: Suggested Citation