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Semiparametric three step estimation methods in labor supply models

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  • Fernández, Ana I.
  • Rodríguez-Póo, Juan M.
  • Sperlich, Stefan

Abstract

The aim of this paper is to provide an alternative way of specification and estimation of a labor supply model. The proposed estimation procedure can be included in the so called predicted wage methods and its main interest is twofold. First, under standard assumptions in studies of labor supply, the estimator based on predicted wages is shown to be consistent and asymptotically normal. Moreover, we propose also a consistent estimator of the asymptotic variance covariance matrix estimator. Secondly, we introduce a semiparametric estimator based on marginal integration techniques that allows for nonlinear relationships between working hours and other explanatory variables. We show the asymptotic properties of this estimator and we compare the results empirically against those obtained in standard three step estimators based on predicted wages.

Suggested Citation

  • Fernández, Ana I. & Rodríguez-Póo, Juan M. & Sperlich, Stefan, 1998. "Semiparametric three step estimation methods in labor supply models," SFB 373 Discussion Papers 1998,71, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    • Handle: RePEc:zbw:sfb373:199871
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    Cited by:

    1. Jaume Garcia & María J. Suárez, 2001. "Female labour supply in Spain: The importance of behavioural assumptions and unobserved heterogeneity specification," Economics Working Papers 542, Department of Economics and Business, Universitat Pompeu Fabra.
    2. Stefan Sperlich & Juan M. Rodríguez-Póo & Ana I. Fernández, 2005. "Semiparametric three-step estimation methods for simultaneous equation systems," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(6), pages 699-721.

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