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Choice among Wage-Hours Packages: An Empirical Investigation of Male Labor Supply

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  • Biddle, Jeff E
  • Zarkin, Gary A

Abstract

This article specifies and estimates an empirical model of male labor supply based on an implicit market model of wage-hours determination. The authors discuss how moving from a standard labor supply model to an implicit market model affects model specification and choice of estimation technique. They find that average hourly earnings are not independent of hours worked and that ordinary least squares estimates of the wage-hours relationship are biased. They also show that a labor supply model that assumes wages to be independent of hours worked produces a positively biased estimate of the effect of the wage on labor supply. Copyright 1989 by University of Chicago Press.

Suggested Citation

  • Biddle, Jeff E & Zarkin, Gary A, 1989. "Choice among Wage-Hours Packages: An Empirical Investigation of Male Labor Supply," Journal of Labor Economics, University of Chicago Press, vol. 7(4), pages 415-437, October.
    • Handle: RePEc:ucp:jlabec:v:7:y:1989:i:4:p:415-37
    DOI: 10.1086/298215
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    Cited by:

    1. John K. Dagsvik & Zhiyang Jia, 2014. "Labor supply as a discrete choice among latent jobs: Unobserved heterogeneity and identification," Discussion Papers 786, Statistics Norway, Research Department.
    2. John K. Dagsvik & Zhiyang Jia, 2016. "Labor Supply as a Choice Among Latent Jobs: Unobserved Heterogeneity and Identification," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 31(3), pages 487-506, April.
    3. Ana Paula Martins, 2018. "Concentration and Other Wage Determinants," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 61(3), pages 75-109.
    4. Wolf, Elke, 2002. "Lower wage rates for fewer hours? A simultaneous wage-hours model for Germany," Labour Economics, Elsevier, vol. 9(5), pages 643-663, November.
    5. Gibson, Matthew & Shrader, Jeffrey, 2014. "Time Use and Productivity: The Wage Returns to Sleep," University of California at San Diego, Economics Working Paper Series qt8zp518hc, Department of Economics, UC San Diego.
    6. Daniel Aaronson & Eric French, 2009. "The Effects of Progressive Taxation on Labor Supply when Hours and Wages Are Jointly Determined," Journal of Human Resources, University of Wisconsin Press, vol. 44(2).
    7. Richard Blundell & Mike Brewer & Marco Francesconi, 2005. "Job changes, hours changes and the path of labour supply adjustment," IFS Working Papers W05/21, Institute for Fiscal Studies.
    8. Richard Blundell & Mike Brewer & Marco Francesconi, 2008. "Job Changes and Hours Changes: Understanding the Path of Labor Supply Adjustment," Journal of Labor Economics, University of Chicago Press, vol. 26(3), pages 421-453, July.
    9. Daniel S. Hamermesh, 2007. "Time to Eat: Household Production under Increasing Income Inequality," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(4), pages 852-863.
    10. Joseph G. Altonji & Emiko Usui, 2007. "Work Hours, Wages, and Vacation Leave," ILR Review, Cornell University, ILR School, vol. 60(3), pages 408-428, April.
    11. Vella, Francis & Verbeek, Marno, 1999. "Two-step estimation of panel data models with censored endogenous variables and selection bias," Journal of Econometrics, Elsevier, vol. 90(2), pages 239-263, June.
    12. Feinerman, Eli & Fleischer, Aliza & Simhon, Avi, 2004. "Distributional Welfare Impacts of Public Spending: The Case of Urban versus National Parks," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(2), pages 1-17, August.
    13. Hamermesh, Daniel S., 2020. "H. Gregg Lewis: Perhaps the Father of Modern Labor Economics," IZA Discussion Papers 13551, Institute of Labor Economics (IZA).
    14. Hamermesh, Daniel S. & Donald, Stephen G., 2008. "The effect of college curriculum on earnings: An affinity identifier for non-ignorable non-response bias," Journal of Econometrics, Elsevier, vol. 144(2), pages 479-491, June.
    15. Richard Rogerson, 2011. "Individual and Aggregate Labor Supply with Coordinated Working Times," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43, pages 7-37, August.
    16. Martinez-Granado, Maite, 2005. "Testing labour supply and hours constraints," Labour Economics, Elsevier, vol. 12(3), pages 321-343, June.
    17. Richard Blundell & Mike Brewer & Marco Francesconi, 2005. "Job changes, hours changes and labour market flexibility: panel data evidence for Britain," IFS Working Papers W05/12, Institute for Fiscal Studies.
    18. Daniel S. Hamermesh & Stephen G. Donald, 2004. "The Effect of College Curriculum on Earnings: Accounting for Non-Ignorable Non-Response Bias," NBER Working Papers 10809, National Bureau of Economic Research, Inc.
    19. Kerwin Kofi Charles & Philip Decicca, 2007. "Hours Flexibility And Retirement," Economic Inquiry, Western Economic Association International, vol. 45(2), pages 251-267, April.
    20. Edward E. Leamer & Christopher F. Thornberg, 2000. "Effort and Wages: A New Look at the Interindustry Wage Differentials," NBER Chapters, in: The Impact of International Trade on Wages, pages 37-84, National Bureau of Economic Research, Inc.
    21. L. Bryan, Mark, 2006. "Paid holiday entitlements, weekly working hours and earnings in the UK," ISER Working Paper Series 2006-52, Institute for Social and Economic Research.

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