Labor supply in Italy

Abstract

The present study tries to overcome some of the shortcomings of the standard empirical labor supply models by applying an alternative approach which allows for complex non-convex budget sets, highly non-linear labor supply curves and imperfect markets with institutional constraints. The model is estimated on Italian microdata. The empirical results demonstrate that the model reproduces the distributions of labor supply for married males and married females quite well. Moreover, the results show that male labor supply is rather inelastic while labor supply among females, especially participation, is considerably more elastic.