Title

Testing Whether Unemployment Represents Intertemporal Labor Supply Behavior

Author(s)

John C. Ham John Ham (University of Toronto and Princeton University)

Abstract

This study proposes and implements a specification test for the hypothesis that unemployment represents intertemporal labour supply behavior. The test allows for uncertainty and endogenous unemployment. Given standard specifications of the intertemporal labour supply model, I find strong evidence against this interpretation of unemployment. These results indicate the need to turn to either 1) alternative models where unemployed workers are off a supply function or ii) more complex models of intertemporal substitution.

Creation Date

1985-06

Section URL ID

IRS

Paper Number

196

URL

https://dataspace.princeton.edu/bitstream/88435/dsp01ng451h50f/1/196.pdf

File Function

Jel

D02

Keyword(s)

unemployment, life-cycle, labor supply

Suppress

false

Series

1