Abstract
We suggest the first large-scale international comparison of labor supply elasticities for 17 European countries and the United States using a harmonized empirical approach. We find that own-wage elasticities are relatively small and more uniform across countries than previously considered. Nonetheless, such differences do exist, and are found not to arise from different tax-benefit systems, wage/hour levels, or demographic compositions across countries, suggesting genuine differences in work preferences across countries. Furthermore, three other findings are consistent across countries: The extensive margin dominates the intensive margin; for singles, this leads to larger responses in low-income groups; and income elasticities are extremely small.
- Received July 2012.
- Accepted July 2013.
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Jump to section
- Article
- Abstract
- I. Introduction
- II. Common Empirical Approach
- III. Results
- IV. Assessing Cross-Country Differences in Elasticity Size
- V. Concluding Discussion
- Appendix 1 Descriptive Statistics and Hour Distribution
- Appendix 2 Estimates of the Wage Equation
- Appendix 3 Labor-Supply Model: Estimates
- Appendix 4 Labor Supply Elasticities
- Appendix 5 Robustness Checks
- Appendix 6 Assessing Cross-Country Differences in Elasticity Size
- Footnotes
- References
- Figures & Data
- Info & Metrics
- References