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- Title
THE TOBIT MODEL, HOURS OF WORK AND INDUSTRIAL CONSTRAINTS.
- Authors
Moflitt, Robert
- Abstract
The Tobit model originally set forth by the researcher James Tobin in 1958 is now used routinely to estimate labor-supply equations with hours of work as the dependent variable, for hours are clustered at zero for non-workers. In the article the Tobit model is modified to account for the particular aspect of hours constraints. It is assumed that individuals are constrained in how little they can work but not in how much they can work. Each individual draws a random, unobserved value for his or her lower bound, giving the minimum hours he or she can work. The individual has three choices, work above the minimum, work at the minimum, or zero hours. To provide an application of the model, it has been estimated on data from three of the negative-income-tax experiments. Only prime-age males are examined, for whom institutional constraints are most likely to be a problem. The problem with the Tobit model is that it assumes a continuous, normal distribution of hours. Hence, while the underlying data are bimodally distributed, the predicted responses are unimodally distributed.
- Subjects
ECONOMETRIC models; TOBITS; LABOR supply; WORKING hours; REGRESSION analysis; EQUATIONS; ESTIMATION theory; WORK structure; ECONOMICS
- Publication
Review of Economics & Statistics, 1982, Vol 64, Issue 3, p510
- ISSN
0034-6535
- Publication type
Article
- DOI
10.2307/1925952