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Labour supply in Italy: an empirical analysis of joint household decisions, with taxes and quantity constraints
Author(s) -
Aaberge Rolf,
Colombino Ugo,
Strøm Steinar
Publication year - 1999
Publication title -
journal of applied econometrics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.878
H-Index - 99
eISSN - 1099-1255
pISSN - 0883-7252
DOI - 10.1002/(sici)1099-1255(199907/08)14:4<403::aid-jae520>3.0.co;2-4
Subject(s) - microdata (statistics) , economics , labour supply , imperfect , microsimulation , labour economics , econometrics , population , demography , sociology , transport engineering , engineering , census , linguistics , philosophy
This study applies an econometric framework which allows for complex non‐convex budget sets, highly non‐linear labour supply curves and imperfect markets with institutional constraints. A married couple's version of the model is estimated on Italian microdata. The empirical results show that male labour supply is rather inelastic while labour supply among females, especially participation, is considerably more elastic. The elasticities depend strongly on household income. The largest elasticities are found for females living in poor households. The results of the tax simulations suggest that there are only modest labour supply responses from replacing the 1987 system by proportional taxes. Copyright © 1999 John Wiley & Sons, Ltd.