Abstract
This paper examines the argument advanced by Smith (1977) that it is inappropriate to include current assets in labor supply functions, under the assumption that a life-cycle model underlies both the asset accumulation process and the labor supply process. It is shown that on a theoretical level current labor supply may still be viewed as a function of current assets. It is also demonstrated that in empirical work based upon a life-cycle labor supply model, it may or may not be appropriate to use current assets or current wealth as an independent variable in a labor supply regression
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