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The Marginal Rate of Substitution and the Specification of Labour Supply Models
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.ORCID iD: 0000-0001-9244-7018
(English)Manuscript (preprint) (Other academic)
Abstract [en]

In this note I revisit Heckman's proposal, [Heckman, 1974], to specify a static labour supply model using a simple formulation for the Marginal Rate of Substitution between total expenditure on consumption and hours of work. I describe the analytical form of the expenditure function and I show how the direct and indirect utility functions can be recovered. I propose an alternative specification for the MRS and in this case I describe analytically the labour supply functions, the indirect and direct utility functions as well as the expenditure function.

Keywords [en]
Labour Supply Model, Specification, Marginal Rate of Substitution
National Category
Economics
Research subject
Economics; Economics; Econometrics
Identifiers
URN: urn:nbn:se:umu:diva-168819Local ID: No 922OAI: oai:DiVA.org:umu-168819DiVA, id: diva2:1413860
Available from: 2020-03-11 Created: 2020-03-11 Last updated: 2020-03-11

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Lanot, Gauthier

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CiteExportLink to record
Permanent link

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Citation style
  • apa
  • ieee
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Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf