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Journal of Economic Theory and Econometrics
Journal of the Korean Econometric Society
Building an Identified Equilibrium Model of Aggregate Labor Market
Vol.17, No.4, December 2006, 25–44
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Chang-Kon Choi
(Department of Economics, Chonbuk National University)
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Abstract
This paper builds an econometrically identified equilibrium model of the labor market, by which one can jointly review labor supply and demand structure. A simple model economy is presented, where preferences are time-nonseparable, but technology is time-separable. The model allows recovery of the preference and technology parameters relevant to labor supply and demand behavior. The empirical model is verified to satisfy an econometric identification condition and estimated using a nonlinear instrumental method. The identified labor supply and demand parameters are consistent with theory. In conclusion, it appears that aggregate labor market fluctuations do not easily reject equilibrium interpretation.
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Keywords
Identification of Aggregate labor demand and supply, Time-nonseparable preference, Intertemporal substitution in labor supply, Adjustment costs in labor demand, Interest rate and labor market, Econometric Identification and instrumental estimation of nonl |
JEL classification codes
E24, J40 |
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