Loeffler, Max; Peichl, Andreas; Siegloch, Sebastian - Institute for the Study of Labor (IZA) - 2014
elasticities derived from microeconometric models can also be explained by modeling assumptions with respect to wages. Specifically … very sensitive to the treatment of wages. In particular, the often-made but highly restrictive independence assumption … between preferences and wages is key. To overcome this restriction, we propose a flexible estimation strategy that nests …