The Effects of Hours Constraints on Labor Supply Estimates

20 Pages Posted: 8 Jul 2004 Last revised: 28 Sep 2010

See all articles by Shalumit Kahn

Shalumit Kahn

Independent

Kevin Lang

Boston University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: July 1988

Abstract

Almost all labor supply models are estimated under the assumption that workers are free to choose their hours. However, theory, casual empiricism and survey data suggest that many workers are not free to vary the hours within a job. Consequently, labor supply estimates based on actual hours of work may be biased. Using Canadian data on desired hours of work, we find that using actual hours causes labor supply estimates to be biased upwards but the bias is small.

Suggested Citation

Kahn, Shalumit and Lang, Kevin, The Effects of Hours Constraints on Labor Supply Estimates (July 1988). NBER Working Paper No. w2647, Available at SSRN: https://ssrn.com/abstract=439574

Shalumit Kahn

Independent

Kevin Lang (Contact Author)

Boston University - Department of Economics ( email )

270 Bay State Road
Boston, MA 02215
United States

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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