Structural labour supply models and microsimulation / Rolf Aaberge (Statistics Norway, ESOP, University of Oslo and IZA), Ugo Colombino (University of Torino and IZA) ; IZA Institute of Labor Economics
VerfasserAaberge, Rolf ; Colombino, Ugo
KörperschaftForschungsinstitut zur Zukunft der Arbeit
ErschienenBonn, Germany : IZA Institute of Labor Economics, May 2018
Elektronische Ressource
Umfang1 Online-Ressource (36 Seiten)
SerieDiscussion paper ; no. 11562
 Das Dokument ist öffentlich zugänglich im Rahmen des deutschen Urheberrechts.
Structural labour supply models and microsimulation [0.4 mb]
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The purpose of the paper is to provide a discussion of the various approaches for accounting for labour supply responses in microsimulation models. The paper focuses attention on two methodologies for modelling labour supply: the discrete choice model and the random utility - random opportunities model. The paper then describes approaches to utilising these models for policy simulation in terms of producing and interpreting simulation outcomes, outlining an extensive literature of policy analyses utilising these approach. Labour supply models are not only central for analyzing behavioural labour supply responses but also for identifying optimal tax-benefit systems, given some of the challenges of the theoretical approach. Combining labour supply results with individual and social welfare functions enables the social evaluation of policy simulations. Combining welfare functions and labour supply functions, the paper discusses how to model socially optimal income taxation.