The importance of locational choice in an empirical labour supply model

Abstract

An estimation of labour supply is modelled using the theory of urban household behaviour. The major purpose is to test the (implicit) assumption in previous labour supply studies that work travel and housing consumption are weakly separable from the hours of work. The results, which are obtained using Swedish data, imply that the hypothesis of weak separability is clearly rejected. We also find that the choice of location affects policy-relevant conclusions about the labour supply behaviour.