Intertemporal Preferences and Labor Supply
Abstract
Recently, several authors have argued for the use for the use of dynamic preference
structures for leisure which incorporate forms of intertemporally nonseparable utility
in the analysis of intertemporal labor supply decisions. In this paper, we examine
whether such nonseparable utility functions are important in characterizing microdata
on life-cycle labor supply. Using longitudinal data on males from the Panel Study
of Income Dynamics, we estimate a model of life-cycle labor supply and consumption
under uncertainty in which the structure of intertemporal leisure preferences is allowed
to be nonseparable in leisure. Our model nests as special cases a number of alternative
specifications considered in the literature. We investigate the robustness of our
findings to certain forms of population heterogeneity and to some types of model misspecification.
Across a number of alternative specifications, we find evidence that the standard
assumption of intertemporally separable preferences for leisure is not consistent
with data for prime-age males.
Type
Journal articlePermalink
https://hdl.handle.net/10161/1858Collections
More Info
Show full item record
Articles written by Duke faculty are made available through the campus open access policy. For more information see: Duke Open Access Policy
Rights for Collection: Scholarly Articles
Works are deposited here by their authors, and represent their research and opinions, not that of Duke University. Some materials and descriptions may include offensive content. More info