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THE ROLE OF ASSETS IN LABOR SUPPLY FUNCTIONS
Author(s) -
COTTERMAN ROBERT F.
Publication year - 1981
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1981.tb00332.x
Subject(s) - economics , supply , asset (computer security) , argument (complex analysis) , function (biology) , current asset , labour economics , work (physics) , microeconomics , variable (mathematics) , macroeconomics , market liquidity , computer science , mechanical engineering , mathematical analysis , biochemistry , chemistry , computer security , mathematics , evolutionary biology , engineering , biology
This paper examines the argument advanced by Smith (1977) that it is inappropriate to include current assets in labor supply functions, under the assumption that a life‐cycle model underlies both the asset accumulation process and the labor supply process. It is shown that on a theoretical level current labor supply may still be viewed as a function of current assets. It is also demonstrated that in empirical work based upon a life‐cycle labor supply model, it may or may not be appropriate to use current assets or current wealth as an independent variable in a labor supply regression