Empirical approaches for analysing consumption and labour supply in a life cycle perspective

Abstract

During the last decade several approaches for estimation of structural life cycle models of labour supply and consumption from micro data have been proposed. Ideally, estimation requires complete, individual, life cycle data for a variety of variables such as labour supply, consumption of durables and non-durables, and their expected prices, including interest and income tax rates. No single data set includes all these variables, and the challenge has been to find specifications that can be used for estimation of the unknown parameters of interest from the data actually available. This paper surveys these approaches.