An economic model of fringe benefits and labor supply: An application of the Almost Ideal Demand System

Date of Award




Degree Name

Doctor of Philosophy (Ph.D.)



First Committee Member

Philip K. Robins, Committee Chair


In 1991, the percentage of total compensation received in the form of fringe benefits reached 17 percent in the United States, yet most studies of the demand for fringe benefits continue to use only hourly wages when measuring total compensation. The objective of this dissertation is to extend the simple static model of labor supply to include the demand for fringe benefits. Unlike previous research, which has not fully utilized theoretical or econometric techniques, the model presented in this study offers the flexibility to incorporate all types of fringe benefits. The model is based on the principles of utility maximization and takes advantage of the theory of duality to derive an econometric specification for estimating the model.The data for this study are obtained from Wave 4 of the 1984 panel of the Survey of Income and Program Participation. Separate analyses are conducted for 2,078 males and 1,317 females, who are both working and participating in a cost-sharing pension plan with their employer.


Economics, Labor

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