<p>&quot;Extensive margin&quot; is &quot;whether you work at all, or don't work&quot;.</p>
<p>&quot;Intensive margin&quot; is &quot;how many hours you work, given that you are working&quot;.</p>
<p>To estimate the extensive margin, your outcome would be a binary variable that takes the value 1 if a person works.</p>
<p>To estimate the intensive margin, you can restrict to people with hours worked of nonzero and use hours worked as the outcome.
Sample restrictions such as this can cause bias, so you may consider a Heckman selection two-step estimator. (Not sure what this is for, that may be more complicated than what you need to do).</p>
<p>Good luck!</p>

CC BY-SA 4.0
2024-06-07T07:39:08.683Z
2024-06-07T07:39:08.683Z
Michael Gmeiner
<p>I am trying to see the effects of exogenous shocks on paid and unpaid labor. In this regard, I am trying to incorporate intensive and extensive margins of labor participation. I use &quot;hours worked per day&quot; as extensive margin. Can I use Inverse hyperbolic sine transformation as measure of intensive margin? The motivation is to include the 0-hours worked and also since the interpretation is &quot;percentage change in hours worked&quot;, I think that it captures intensive margin.</p>
<p>I read the discussion thread titled &quot;What is the difference between intensive margin and extensive margin in labor economics?&quot; But still I am confused if I am in the right track.</p>

<microeconomics><econometrics><labor-economics>
Defining Intensive Margin and Extensive Margin
jheelum sarkar
# Defining Intensive Margin and Extensive Margin

(Asked by: username_0 on 2024-06-07)

I am trying to see the effects of exogenous shocks on paid and unpaid labor. In this regard, I am trying to incorporate intensive and extensive margins of labor participation. I use "hours worked per day" as extensive margin. Can I use Inverse hyperbolic sine transformation as measure of intensive margin? The motivation is to include the 0-hours worked and also since the interpretation is "percentage change in hours worked", I think that it captures intensive margin.

I read the discussion thread titled "What is the difference between intensive margin and extensive margin in labor economics?" But still I am confused if I am in the right track.

**Tags:** microeconomics, econometrics, labor-economics

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## 1 answers

### Answer by username_1 on 2024-06-07. Score: 2

"Extensive margin" is "whether you work at all, or don't work".

"Intensive margin" is "how many hours you work, given that you are working".

To estimate the extensive margin, your outcome would be a binary variable that takes the value 1 if a person works.

To estimate the intensive margin, you can restrict to people with hours worked of nonzero and use hours worked as the outcome.
Sample restrictions such as this can cause bias, so you may consider a Heckman selection two-step estimator. (Not sure what this is for, that may be more complicated than what you need to do).

Good luck!


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