Suppose that you estimate the following female labor supply relationship: a. Interpret the coefficient on after-tax wages.

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Suppose that you estimate the following female labor supply relationship:

a. Interpret the coefficient on after-tax wages. What does this coefficient imply about the effect of increasing wages from $6 to $10 per hour on labor supply?

b. What can we learn from this estimate about the income and substitution effects of wages on labor supply?

c. How might this coefficient estimate be biased? Explain.

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Public Finance and Public Policy

ISBN: 978-1429278454

4th edition

Authors: Jonathan Gruber

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Question Posted: Apr 25, 2015 07:45 AM

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Suppose that you estimate the following female labor supply relationship: a. Interpret the coefficient on after-tax wages.

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Labor supply i 320 85aftertax wage i 320college graduate i 120married i where labor supply is measur...View the full answer

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