Income-leisure preferences in New Zealand: 1988-2013

Abstract

This paper reports estimates for discrete choice labour supply models for New Zealand wage and salary earners for four periods: 1988/89-1992/93, 1993/94-1997/98, 2000/01-2007/08, and 2008/09-2012/13. Utilizing data from the Household Economic Survey (HES) between 1987 and 2013 the appropriate data are pooled and separated into five demographic groups (coupled men, coupled women, single men, single women, and single parents), allowing the estimation of five labour supply models for each year period. By calculating these preferences for varying time periods this provides the opportunity to evaluate how the preference for work, and therefore labour supply responses, had evolved during this time period. The main purpose of the exercise is to derive the labour supply responses of income units when faced with a change in disposable incomes. A discrete choice labour supply model uses microdata to estimate the preference over income and leisure time for each of these demographic groups, which can then be used to calculate changes in labour supply as disposable income opportunities at varying hours of work change.