Econometric analysis of labor supply in a life cycle context with uncertainty

Abstract

The paper considers a recent econometric approach for analysing labor supply in a life cycle context. The model we present extends MaCurdy's (1982) model in that the wage rate is assumed to depend on previous labor market experience. Our data gives, however, no support to this hypothesis. The empirical results reported should be interpreted with caution because observations on hours worked may be seriously biased and the wage rates are only observed in one period.