This chapter is concerned with the identification and estimation of models of labor supply. The focus is on the key issues that arise from unobserved heterogeneity, nonparticipation and dynamics. We examine the simple “static” labor supply model with proportional taxes and highlight the...

Moment conditions are derived for dynamic linear panel data models with linear individual specific effects in the mean and multiplicative individual effects in the conditional ARCH type variance function. The relation and correlation between the linear and multiplicative effects are...