The authors examine the effects of male and female labor supply on household demands and present a simple and robust test for the separability of demands from labor supply. Using data on individual households from six years of the U.K. Family Expenditure Survey, they estimate a demand system for...

Recent theoretical work has shown the importance of measuring microeconomic uncertainty for models of both general and partial equilibrium under imperfect insurance. In this paper the assumption of i.i.d. income innovations used in previous empirical studies is removed and the focus of the...

The 1980s tax reforms and the changing dispersion of wages offer one of the best opportunities yet to estimate labor supply effects. Nevertheless, changing sample composition, aggregate shocks, the changing composition of the tax paying population, and discontinuities in the tax system create...

The authors propose a method to test for liquidity constraints that relies on using the within period marginal rate of substitution condition as a benchmark to evaluate the intertemporal Euler equation. If spot markets for nondurable goods exist but financial markets are imperfect, the...

This paper examines changes in the distribution of wages using bounds to allow for the impact of nonrandom selection into work. We show that worst case bounds can be informative. However, because employment rates in the United Kingdom are often low, they are not informative about changes in...