Work Hours Offer in Colombia: an Approach to its Determinants, 2012

Abstract

When participating in the job market, an individual must determine the amount of work hours to offer, a situation illustrated by economic theory through the income and substitution effects. This paper reports the results of the econometric estimation of a three-stage model of the hours of individual work for Colombia, based on the 2012 Quality of Life Survey. In the first stage, a model of the probability of being employed is made then, a Mincer Equation corrected by selection bias is estimated and, finally, an equation of work hours is estimated using the Tobit model, in terms of wages predicted to correct endogeneity. Results show that the substitution effect takes precedence over the income effect that age (up to a threshold), being head of household, having children under five years of age, being married or living in a common-law marriage and, finally, having a written employment contract, have a positive effect on the number of hours offered on the other hand, unearned income has a negative effect on the number of hours offered.