The Hausman-MaCurdy controversy: why do the results differ across studies?

The two perhaps most influential empirical labor supply studies carried out in the United States in recent years, Hausman (1981) and MaCurdy, Green, and Paarsch (1990), report sharply contradicting labor supply estimates. In this paper we show that the seemingly irreconcilable views on the size of w...

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Publicado en:Journal of Human Resources Vol. 35; no. 1; pp. 204 - 221
Autores principales: Eklöf, Matias, Sacklén, Hans
Formato: Artículo
Publicado: University of Wisconsin Press Winter2000
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: The Hausman-MaCurdy controversy: why do the results differ across studies?
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        au:
          Eklöf, Matias
          Sacklén, Hans
      su:
        Parameter estimation
        Monte Carlo method
        Mathematical models of economics
        Income tax
        Labor supply
        Mathematical models
        United States
      sug:
        subj:
          United States
          Parameter estimation
          Monte Carlo method
          Mathematical models of economics
          Income tax
          Labor supply
          Mathematical models
      ab: The two perhaps most influential empirical labor supply studies carried out in the United States in recent years, Hausman (1981) and MaCurdy, Green, and Paarsch (1990), report sharply contradicting labor supply estimates. In this paper we show that the seemingly irreconcilable views on the size of work disincentive effects and welfare losses can be attributed to the use of differing nonlabor income and wage measures in the two studies. Monte Carlo experiments suggest that the wage measure adopted by MaCurdy, Green, and Paarsch (1990) might cause a severely downward biased wage effect such that data falsely refute the basic notion of utility maximization. Reprinted by permission of the publisher.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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