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Labor Supply and Taxation$
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Richard Blundell, Andreas Peichl, and Klaus F. Zimmermann

Print publication date: 2016

Print ISBN-13: 9780198749806

Published to Oxford Scholarship Online: June 2016

DOI: 10.1093/acprof:oso/9780198749806.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 24 October 2021

Unemployment and Female Labor Supply

Unemployment and Female Labor Supply

Chapter:
(p.110) 5 Unemployment and Female Labor Supply
Source:
Labor Supply and Taxation
Author(s):

Richard Blundell

John Ham

Costas Meghir

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780198749806.003.0006

This chapter extends the standard ‘Tobit’ model of labour supply and participation by introducing the possibility that zero hours of work represent unemployment and not simply non-participation. The proposed Double-Hurdle model offers a framework for studying the effects of macroeconomic variables on labour force participation. This is achieved by modelling the probability that a particular individual obtains a job at his/her perceived market wage. The chapter applies the theory to a sample of married women drawn from the UK Family Expenditure Survey. The proposed model supplants the Tobit model as it provides a more realistic model of the labour market; the traditional model produces inconsistent estimates of labour supply parameters since individuals are mis-specified as non-participants. In addition, the chapter modifies the standard model of female labour supply to allow for unemployed workers who want to work but cannot find jobs in their perceived market wage.

Keywords:   unemployment, Tobit model, statistical model, labour market, labour supply parameters, non-participants, labour force statistics, labour market participants, market wage

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