Weather And Intertemporal Labor Supply: Results From German Time-Use Data

Dynamic models of intertemporal labor supply suggest that workers substitute labor for leisure as a response to transitory wage changes. Empirical estimates of intertemporal substitution are difficult to interpret as wage changes are rarely transitory and workers may not have flexible working times. We address both issues by estimating an intertemporal labor supply model with German time-use data as well as information on weather and the flexibility of working time arrangements. Our results provide some evidence on an interday labor supply substitution effect for women but not for men.