Labor Supply as a Choice among Latent Jobs: Unobserved Heterogeneity and Identification
Published in Journal of Applied Econometrics, 2016
This paper discusses aspects of a modeling framework in which the notion of job choice is fundamental. In this framework, workers are assumed to have preferences over latent job opportunities belonging to worker-specific choice sets from which they choose their preferred job. The main contribution of this paper is an analysis of the identification problem under various conditions, when conventional cross-section micro-data are applied. The modeling framework is applied to analyze labor supply behavior for married/cohabiting couples using Norwegian micro data. Based on the empirical model, we discuss further qualitative properties of the model and simulation of counterfactual policy reforms.
Recommended citation: Dagsvik, J. K., and Jia, Z. (2016) Labor Supply as a Choice Among Latent Jobs: Unobserved Heterogeneity and Identification. J. Appl. Econ., 31: 487–506. doi: 10.1002/jae.2428.
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