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Quantity Rationing and Concavity in a Flexible Household Labor Supply Model

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  • Kapteyn, Arie
  • Kooreman, Peter
  • van Soest, Arthur

Abstract

In the first part of this paper, the authors derive explicit expressions for the direct utility functions, conditional demand equations, and concavity conditions in both price/income and quantity space for the demand system introduced by Hausman and Ruud (1984). These results are then used in an empirical static family labor supply model, in which kinked budget constraints and unemployment benefits are taken into account for both spouses. Imposition of concavity is necessary for consistent estimation and the concavity constraint appears to be binding. Copyright 1990 by MIT Press.

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  • Kapteyn, Arie & Kooreman, Peter & van Soest, Arthur, 1990. "Quantity Rationing and Concavity in a Flexible Household Labor Supply Model," The Review of Economics and Statistics, MIT Press, vol. 72(1), pages 55-62, February.
    • Handle: RePEc:tpr:restat:v:72:y:1990:i:1:p:55-62
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