@article{bcb704084c534d26a57c65cf7bfd07c8,
title = "Estimation of a Labour Supply Model with Censoring Due to Unemployment and Underemployment",
abstract = "This study proposes and implements a method of labour supply estimation which is appropriate when the sample contains unemployed and underemployed workers. The estimation method consists of excluding unemployed and underemployed workers from the sample and then using (to avoid selection bias) an extension of Heckman{\textquoteright}s approach to the case where two correlated selection rules generate the sample. Hausman{\textquoteright}s specification test is then used to determine whether ignoring constrained workers has led to biases in traditional labour supply estimates, and the empirical results suggest that previous estimates of several important parameters are biased. Since the biases go in the direction that would be predicted by the hypothesis that the unemployed and underemployed are constrained, the results support this hypothesis.",
author = "Ham, {John C.}",
note = "Funding Information: An earlier version of the paper was presented at the Fourth World Congress of the Econometric Society in Aix-en-Provence, France, 1980. The paper was jointly released as Working Paper 8108, Institute for Policy Analysis, University of Toronto and Working Paper 141, Industrial Relations Section, Princeton University. This paper represents an extensive revision of Chapter 2 of my dissertation in the Department of Economics, Princeton University. I am indebted to my thesis committee. O. Ashenfelter, R. Quandt and J. Brown, for excellent comments and suggestions. I would also like to thank R. Blundell, G. Chamberlain, J. Hausman, J. Heckman, S. Nickell, D. Poirier, P. Ruud, S. Rosen, and A. Yatchew for very helpful discussions or correspondence, as well as J. Altonji, R. Gordon, M. Gunderson, Jane Ham, C. Hsiao, M. King, G. MacDonald, A. Melino, S. Rea, S. Tychsen, R. Winter and two anonymous referees for very useful comments on earlier drafts of this paper. I am responsible for any remaining errors. I also benefitted from comments received during seminars at Bell Laboratories, Columbia, Cornell, McMaster, Princeton, Queen's and Toronto. Generous financial support was provided by the Industrial Relations Section, Princeton University, the Institute for Policy Analysis, University of Toronto, and the Social Sciences and Humanities Research Council of Canada.",
year = "1982",
month = jul,
doi = "10.2307/2297360",
language = "English (US)",
volume = "49",
pages = "335--354",
journal = "Review of Economic Studies",
issn = "0034-6527",
publisher = "Oxford University Press",
number = "3",
}