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Job search, hours restrictions and desired hours of work

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  • Bloemen, H.G.

    (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics)

Abstract

We present a structural empirical job search model in which job offers are characterized by a wage rate and the length of the working week. The unemployed accept a job if the direct utility level of the wage-hours combination is higher than the reservation utility level. The latter is determined by the direct utility of being unemployed (depending on the value of leisure and the benefit level) and the expected gains of search. Specific attention is paid to identification, since the observed hours distribution is determined both by the hours offer distribution and by preferences over hours. To identify the hours offers and the optimal hours (defined by preferences) separately, we use information on desired working hours. We estimate three model variants: a base specification with only information on observed working hours, and two variants with desired hours, which differ from each other in the way in which the relation between desired hours and optimal hours is modeled. We compare the various specifications on basis of differences in the fit of the distribution of unemployment duration, observed working hours and desired working hours and on basis of differences in policy relevant elasticities.

Suggested Citation

  • Bloemen, H.G., 2002. "Job search, hours restrictions and desired hours of work," Serie Research Memoranda 0038, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    • Handle: RePEc:vua:wpaper:2002-38
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    References listed on IDEAS

    as
    1. John C. Ham, 1982. "Estimation of a Labour Supply Model with Censoring Due to Unemployment and Underemployment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(3), pages 335-354.
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    3. Bloemen, Hans G., 2000. "A model of labour supply with job offer restrictions," Labour Economics, Elsevier, vol. 7(3), pages 297-312, May.
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    5. Borsch-Supan, Axel & Hajivassiliou, Vassilis A., 1993. "Smooth unbiased multivariate probability simulators for maximum likelihood estimation of limited dependent variable models," Journal of Econometrics, Elsevier, vol. 58(3), pages 347-368, August.
    6. Blau, David M. & Robins, Philip K., 1986. "Job search, wage offers, and unemployment insurance," Journal of Public Economics, Elsevier, vol. 29(2), pages 173-197, March.
    7. Martijn P. Tummers & Isolde Woittiez, 1991. "A Simultaneous Wage and Labor Supply Model with Hours Restrictions," Journal of Human Resources, University of Wisconsin Press, vol. 26(3), pages 393-423.
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    More about this item

    Keywords

    job search; duration models; labour supply; simulation estimates;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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