Unemployment and the Supply of Labor

This paper integrates reported unemployment into a model of labor supply. Given the assumption that the individual faces a fixed wage rate, the model enables one to estimate empirically the proportion of reported unemployment that is leisure time. From cross section data, these estimates range from about half for married women to zero for men whose wives are out of the labor force. It is concluded that (1) unemployment is partly leisure, (2) the loss of income during a period of unemployment increases hours worked when employment is found, and (3) there is only a slight additional worker effect.