Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Labour supply dynamics at the extensive and intensive margins of the UK men and women

Labour supply dynamics at the extensive and intensive margins of the UK men and women The purpose of this study is to enhance understanding labour supply dynamics of the UK workers by examining whether and to what extent there is state dependence in the labour supply at both the extensive and intensive margins.Design/methodology/approachA dynamic two-tiered Tobit model is applied to the first seven waves of Understanding Society: the UK Household Longitudinal Study. The model used accounts for observed and unobserved individual heterogeneity and serially correlated transitory shocks to labour supply to draw inferences on state dependence.FindingsThe results show that both observed and unobserved individual heterogeneity contributes to observed inter-temporal persistence of the labour supply of the UK workers, and the persistence remains after these factors are controlled for, suggesting true state dependence at both the extensive and intensive margins of the labour supply. The study also finds that at both the margins, the state dependence of labour supply is larger for females than for males and that for both genders the state dependence is larger for people with low education, mature aged workers and people with long-standing illness or impairment. The results also show that estimates from a conventional Tobit model may produce misleading inferences regarding labour supply at the extensive and intensive margins.Originality/valueThis study adds to the international literature on labour supply dynamics by providing empirical evidence for both the extensive and intensive margins of labour supply, while previous studies tend to focus on the extensive margin of labour force participation only. Also, unlike earlier studies that often focus on females, this study compares labour supply dynamics between males and females. The study also compares the estimates from the more flexible two-tiered Tobit model with that from the conventional Tobit model. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Manpower Emerald Publishing

Labour supply dynamics at the extensive and intensive margins of the UK men and women

International Journal of Manpower , Volume 42 (3): 22 – May 19, 2021

Loading next page...
 
/lp/emerald-publishing/labour-supply-dynamics-at-the-extensive-and-intensive-margins-of-the-GAhlxcHakX

References (25)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0143-7720
DOI
10.1108/ijm-12-2019-0533
Publisher site
See Article on Publisher Site

Abstract

The purpose of this study is to enhance understanding labour supply dynamics of the UK workers by examining whether and to what extent there is state dependence in the labour supply at both the extensive and intensive margins.Design/methodology/approachA dynamic two-tiered Tobit model is applied to the first seven waves of Understanding Society: the UK Household Longitudinal Study. The model used accounts for observed and unobserved individual heterogeneity and serially correlated transitory shocks to labour supply to draw inferences on state dependence.FindingsThe results show that both observed and unobserved individual heterogeneity contributes to observed inter-temporal persistence of the labour supply of the UK workers, and the persistence remains after these factors are controlled for, suggesting true state dependence at both the extensive and intensive margins of the labour supply. The study also finds that at both the margins, the state dependence of labour supply is larger for females than for males and that for both genders the state dependence is larger for people with low education, mature aged workers and people with long-standing illness or impairment. The results also show that estimates from a conventional Tobit model may produce misleading inferences regarding labour supply at the extensive and intensive margins.Originality/valueThis study adds to the international literature on labour supply dynamics by providing empirical evidence for both the extensive and intensive margins of labour supply, while previous studies tend to focus on the extensive margin of labour force participation only. Also, unlike earlier studies that often focus on females, this study compares labour supply dynamics between males and females. The study also compares the estimates from the more flexible two-tiered Tobit model with that from the conventional Tobit model.

Journal

International Journal of ManpowerEmerald Publishing

Published: May 19, 2021

Keywords: Unobserved heterogeneity; Labour supply; Dynamic Tobit model; State dependence

There are no references for this article.