Estimation of Couple Labor Supply in the Household Based on Unitary Model

Sadat Zafaranchi, Leila; Mohammadi, Teymour; Ta’ee, Hasan; Abdollah Milani, Mahnoosh

doi:10.22054/joer.2018.8562

Document Type : Research Paper

Authors

¹ PhD Student in Economics, Faculty of Economics, Allameh Tabataba'i University-

² Associate Professor, Faculty of Economics, Allameh Tabataba'i University

³ Associate professor in economy of Allameh Tabataba'i University

⁴ Assistance Professor, Allameh Tabatabaee University

https://doi.org/10.22054/joer.2018.8562

Abstract

Nowadays explaining the behavior of household members is not considered as a neglected black box, and interactions between household members, can influence household consumption, employment and thus its welfare. Applying unitary model, the goal of this research is to estimate and study labor supply functions of dual-earner couples who have non-labor income, using Iranian rural-urban families' cost-expenditure data in year 2013. Supposing wage variable is endogenous, the estimation procedure is based on generalized method of moments. Our findings show that in the pattern of married women's labor supply, inverse of Mill's ratio is negative and statistically significant. So, computing this variable by Heckman's Two Step Model results in consistency of results. The elasticity of own wage labor supply of both couples is positive and statistically significant. From this point of view, the couple's labor supply curve, in studied sample, has standard shape. Studying cross wage elasticity, shows that couples' leisure time are complementary. In line with theoretical base, a rise in non-labor income has negative and statistically significant effect on couples' labor supply hours.

Keywords

References

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Economics Research

Estimation of Couple Labor Supply in the Household Based on Unitary Model

References

References

Volume 17, Issue 67
January 2018
Pages 1-34

Estimation of Couple Labor Supply in the Household Based on Unitary Model

References

References

Volume 17, Issue 67January 2018Pages 1-34

Volume 17, Issue 67
January 2018
Pages 1-34