Household labour supply with rationing in Spain

Abstract

This paper provides new empirical evidence on household labour supply with rationing. To that end, we use the latest Spanish data in order to estimate three flexible functional forms, namely the NLES, the quadratic and the Hausman - Ruud forms and calculate the income and wage elasticities. We find that the number of dependants has a negative effect on the labour supply of the female. Moreover, the North and the East Spanish regions have a clearly positive effect on the labour supply of the female, whilst the North has the same effect on that of the male. The elasticities of three functional forms are very similar. Male labour supply is slightly decreasing with the wage, whilst for the female it is increasing. Leisure is a normal good for both spouses, as expected, whilst the labour hours are net substitutes.