Central Data Catalog

Citation Information

Type Journal Article - Review of Economic Studies
Title Shadow wages and peasant labour supply: An econometric application to Peruvian Sierra
Volume 60
Issue 4
Publication (Day/Month/Year) 1993
Page numbers 903-921
URL http://www.jstor.org/pss/2298105
This paper develops a methodology for estimating structural time-allocation models for self-employed households and applies it to peasant family labour supply behaviour in the Peruvian Sierra. The opportunity costs of time, or shadow wages, of household workers are explicitly estimated from an agricultural production function. Using an instrumental variables procedure, the household's structural labour supply parameters are recovered from variation in these shadow wages. The empirical results are robust to a number of alternative specifications and diagnostic tests and lend support to the rational allocation of time by peasant households.

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