Female Labor Supply in Spain : The Importance of Behavioral Assumptions and Unobserved Heterogeneity Specification

We estimate four models of female labor supply using a Spanish sample of married women from 1994, taking into account the complete form of the individual's budget set. The models differ in the hypotheses relating to the presence of optimization errors and/or the way non-workers contribute to the likelihood function. According to the results, the effects of wages and non-labor income on the labor supply of Spanish married women depend on the specification used. The model which has both preference and optimization errors and allows for both voluntarily and involuntarily unemployed females desiring to participate seems to better fit the evidence for Spanish married women