A stochastic dynamic model of labour supply is specified and analysed empirically. The theoretical model provides a sound structural economic basis for a class of empirical models which have been shown useful. The implications of the estimated model are explored and diagnostic checks are suggested and implemented
Earnings, Unemployment, and the Allocation of Time Over Time
Burdett, K., Kiefer, NM., Mortensen, DT., & Neumann, GR. (1984). Earnings, Unemployment, and the Allocation of Time Over Time. Review of Economic Studies, 51(4), 559-578.