The Predictive Value of Subjective Labor Supply Data: A Dynamic Panel Data Model with Measurement Error
CPB Netherlands Bureau of Economic Policy Research; Institute for the Study of Labor (IZA); Centre for Economic Policy Research (CEPR)
IZA Discussion Paper No. 400
This paper tests the predictive value of subjective labor supply data for adjustments in working hours over time. The idea is that if subjective labor supply data help to predict next year's working hours, such data must contain at least some information on individual labor supply preferences. This informational content can be crucial to identify models of labor supply. Furthermore, it can be crucial to investigate the need for, or, alternatively, the support for laws and collective agreements on working hours flexibility. In this paper I apply dynamic panel data models that allow for measurement error. I find evidence for the predictive power of subjective labor supply data concerning desired working hours in the German Socio-Economic Panel 1988-1996.
Number of Pages in PDF File: 28
Keywords: Labor Supply, Subjective Data, Measurement Error, Dynamic Panel Data Models
JEL Classification: C23, J22
Date posted: November 26, 2001