Discussion of the Estimated Parameters (continued)
| Single men | Single women | Sole parents | ||||
|---|---|---|---|---|---|---|
| Estimated coefficient | z-valueb | Estimated coefficient | z-valueb | Estimated coefficient | z-valueb | |
| Quadratic terms | ||||||
| Income × 100,000 | -0.1747 | -2.98 | -0.4846 | -5.33 | -0.0448 | -0.94 |
| Labour supply × 100 | -0.2998 | -8.46 | -0.2600 | -10.37 | -0.0222 | -0.96 |
| Cross product | ||||||
| Inc. & lab. sup. × 10,000 | -1.4016 | -9.11 | -1.5650 | -7.47 | -0.1917 | -1.07 |
| Linear terms | ||||||
| Income × 100 | ||||||
| constant | 1.0377 | 5.30 | 2.0119 | 7.75 | 0.6118 | 2.55 |
| Youngest child <1 yr | 1.1686 | 1.24 | ||||
| Youngest child 1-3 yrs old | 0.0384 | 0.55 | ||||
| Youngest child 4-5 yrs old | 0.0624 | 0.98 | ||||
| Youngest child 6-9 yrs old | -0.0069 | -0.20 | ||||
| Number of children | 0.0161 | 1.48 | ||||
| Age/10 | 0.1990 | 2.17 | 0.0032 | 0.03 | -0.1205 | -1.83 |
| Age squared/100 | -0.0171 | -1.35 | 0.0016 | 0.10 | 0.0152 | 1.78 |
| Vocational education | -0.1123 | -2.39 | -0.0462 | -0.69 | -0.0549 | -1.86 |
| Certificate | -0.0899 | -2.16 | -0.0242 | -0.36 | -0.0483 | -1.77 |
| Bursary/scholarship | -0.1833 | -4.08 | -0.1340 | -1.94 | -0.0142 | -0.54 |
| Postgraduate degree/other | -0.2291 | -2.80 | 0.1177 | 0.96 | -0.0239 | -0.44 |
| Bachelor degree | -0.0851 | -1.36 | 0.2237 | 2.30 | 0.0555 | 1.07 |
| Postgraduate | 0.0787 | 0.80 | 0.4139 | 2.66 | 0.0186 | 0.32 |
| Live with parents | 0.0636 | 3.08 | 0.0491 | 0.84 | ||
| female | -0.2281 | -2.37 | ||||
| Labour supply | ||||||
| constant | 0.1685 | 6.03 | 0.0947 | 4.21 | 0.0288 | 0.48 |
| Youngest child <1 yr | -0.0608 | -1.37 | ||||
| Youngest child 1-3 yrs old | -0.0301 | -3.18 | ||||
| Youngest child 4-5 yrs old | -0.0381 | -4.05 | ||||
| Youngest child 6-9 yrs old | -0.0319 | -4.89 | ||||
| Number of children | 0.0003 | 0.10 | ||||
| Age/10 | 0.0295 | 3.34 | 0.0308 | 4.72 | 0.0079 | 0.32 |
| Age squared/100 | -0.0041 | -3.48 | -0.0051 | -5.86 | -0.0013 | -0.41 |
| Vocational education | 0.0140 | 3.44 | 0.0250 | 7.50 | 0.0230 | 3.70 |
| Certificate | 0.0113 | 2.90 | 0.0195 | 6.46 | 0.0044 | 0.64 |
| Bursary/scholarship | 0.0008 | 0.20 | 0.0262 | 7.87 | 0.0294 | 3.45 |
| Postgraduate degree/other | 0.0000 | 0.00 | 0.0249 | 4.18 | 0.0334 | 2.11 |
| Bachelor degree | 0.0056 | 1.06 | 0.0280 | 6.40 | 0.0595 | 5.68 |
| Postgraduate | 0.0102 | 1.23 | 0.0303 | 3.06 | 0.0457 | 2.92 |
| female | -0.0603 | -4.83 | ||||
| Time trend | -0.0001 | -0.14 | -0.0003 | -0.44 | 0.0017 | 1.73 |
| Unemployment rate | -0.0013 | -1.79 | -0.0012 | -1.04 | 0.0004 | 0.24 |
| Aged over 60 | -0.0154 | -1.75 | -0.0212 | -2.32 | -0.0254 | -0.37 |
| Eligible for NZ superannuation | -0.0374 | -2.61 | -0.0309 | -2.63 | -0.1793 | -1.97 |
| Live with parents | 0.0090 | 1.33 | ||||
| Fixed costs/100 | ||||||
| Constant | 5.9696 | 11.18 | 2.7718 | 12.96 | 12.6306 | 2.20 |
| Live in capital city | -0.0182 | -0.22 | 0.1618 | 3.08 | -0.1990 | -0.48 |
| Youngest child <1 yr | -10.5666 | -1.87 | ||||
| Youngest child 1-3 yrs old | 0.4599 | 0.18 | ||||
| Youngest child 4-5 yrs old | -2.3726 | -1.02 | ||||
| Youngest child 6-9 yrs old | -0.7688 | -0.45 | ||||
| Female | 1.4647 | 1.25 | ||||
| Single men | Single women | Sole parents | ||||
|---|---|---|---|---|---|---|
| Estimated coefficient | z-valueb | Estimated coefficient | z-valueb | Estimated coefficient | z-valueb | |
| Unobserved heterogeneity | ||||||
| Variance income | 0.0000 | 0.14 | 0.0003 | 0.43 | 0.0000 | 0.18 |
| Variance labour supply | 0.0000 | 0.23 | 0.0000 | 0.58 | 0.0000 | 0.26 |
| Variance fixed cost | 0.0017 | 0.29 | 0.0016 | 0.66 | 0.0033 | 0.46 |
| Covariance inc. & labour supply | 0.0000 | 0.27 | 0.0000 | -0.34 | 0.0000 | -0.44 |
| Covariance inc. & fixed cost | -0.0002 | -0.15 | -0.0006 | -0.46 | 0.0000 | -0.20 |
| Covariance lab.sup. & fixed cost | 0.0000 | -0.25 | 0.0000 | 0.56 | 0.0000 | 0.32 |
| Log likelihood | -7660 | -7280 | -2796 | |||
a Eleven discrete points of labour supply are distinguished for each person: 0 hours for non-participants and people working less than 2.5 hours, 5 hours for people working from 2.5 to 7.5 hours, 10 hours for people working from 7.5 to 12.5 hours, 15 hours for people working from 12.5 to 17.5 hours, 20 hours for people working from 17.5 to 22.5 hours, 25 hours for people working from 22.5 to 27.5 hours, 30 hours for people working from 27.5 to 32.5 hours, 35 hours for people working from 32.5 to 37.5 hours, 40 hours for people working from 37.5 to 42.5 hours, 45 hours for people working from 42.5 to 47.5 hours, and 50 hours for people working more than 47.5 hours.
b The z-value indicates the level of significance of the estimated coefficients. A value of 1.96 or more means that the parameter is significantly different from zero at the 5% level at least. The higher the z-value the more precise the estimated coefficient.
c For sole parents people with a degree are categorized in a group with those having a diploma, because of the limited number of observations on sole parents with a higher level of education.
Finally, the model for sole parents contains one additional explanatory variable, gender, because this group consists of both men and women. The coefficient shows that sole mothers have a lower preference for work and income than sole fathers.
Overall, the characteristics included in the labour supply model had the expected effects on the preferences for labour supply. That is, the preference for employment goes up with age at first and declines again after an age of about 30 (for women) and 35 (for men) is reached. Well-educated individuals have higher labour supply preferences. Children decrease female preferences for labour supply, in particular when it concerns preschool children. The effect on male preferences is not significant, similar to what is found in other studies (Section 3 briefly discusses the results from other research). The increase in the age of eligibility for the New Zealand Superannuation is found to affect all groups significantly by increasing the relevant individuals’ preferences for labour supply.
