life-cycle

Author
Abstract

The purpose of this paper is to summarize a certain line of work on
the interpretation of unemployment in the analysis of male labour supply
behavior. Specifically, this work investigates whether the data support
the null hypothesis that individuals experiencing unemployment are on a
labour supply function, and if the data do not support this hypothesis,
how might a researcher proceed in empirical work. The motivation for
doing this is two fold. First, what unemployment represents is an
intrinsically interesting question, and may have implications beyond
labour supply analysis in terms of macroeconomic theory. Second, if
unemployed workers are constrained in the sense that they are off their
individual labour supply functions, standard labour supply estimation
may involve a fundamental misspecification of the equation. However, it
should be emphasized that the purpose of this paper is to survey one
possible approach to this problem; the paper does not attempt to provide
a general survey on labour supply estimation or on constraints in the
labour market.

Year of Publication
1985
Number
195
Date Published
06/1985
Publication Language
eng
Citation Key
In Unemployment, Search and Labour Supply, ed. Richard Blundeall and Ian Walker (Cambridge, New York and Sydney:Cambridge University Press, 1986)
Ham, J. . (1985). On the Interpretation of Unemployment in Empirical Labour Supply Analysis. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01b8515n380 (Original work published June 1985)
Working Papers
Author
Abstract

This study proposes and implements a specification test for the
hypothesis that unemployment represents intertemporal labour supply
behavior. The test allows for uncertainty and endogenous unemployment.
Given standard specifications of the intertemporal labour supply model, I
find strong evidence against this interpretation of unemployment. These
results indicate the need to turn to either 1) alternative models where
unemployed workers are off a supply function or ii) more complex models
of intertemporal substitution.

Year of Publication
1985
Number
196
Date Published
06/1985
Publication Language
eng
Citation Key
The Review of Economic Studies, Vol. 53, No. 4, Econometrics Special Issue, August 1986
Ham, J. . (1985). Testing Whether Unemployment Represents Intertemporal Labor Supply Behavior. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01ng451h50f (Original work published June 1985)
Working Papers