A Shred of Credible Evidence on the Long-run Elasticity of Labour Supply
AbstractAll public policies regarding taxation and the redistribution of income rely on assumptions about the long-run effect of wages rates on labour supply. The variation in existing estimates calls for a simple, natural experiment in which men can change their hours of work, and in which wages have been exogenously and permanently changed. We use a panel dataset of taxi drivers who choose their own hours, and who experienced two exogenous permanent fare increases, and estimate an elasticity of labour supply of - 0.2, implying that income effects dominate substitution effects in the long-run labour supply of males. Copyright (c) The London School of Economics and Political Science 2010.
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Bibliographic InfoArticle provided by London School of Economics and Political Science in its journal Economica.
Volume (Year): 77 (2010)
Issue (Month): 308 (October)
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Other versions of this item:
- Orley C. Ashenfelter & Kirk B. Doran & Bruce Schaller, 2010. "A Shred of Credible Evidence on the Long Run Elasticity of Labor Supply," NBER Working Papers 15746, National Bureau of Economic Research, Inc.
- Ashenfelter, Orley & Doran, Kirk & Schaller, Bruce, 2010. "A Shred of Credible Evidence on the Long Run Elasticity of Labor Supply," IZA Discussion Papers 4810, Institute for the Study of Labor (IZA).
- Orley Ashenfelter & Kirk B. Doran & Bruce Schaller, 2010. "A Shred of Credible Evidence on the Long Run Elasticity of Labor Supply," Working Papers 1203, Princeton University, Department of Economics, Center for Economic Policy Studies..
- Orley Ashenfelter & Kirk Doran & Bruce Schaller, 2009. "A Shred of Credible Evidence on the Long Run Elasticity of Labor Supply," Working Papers 1180, Princeton University, Department of Economics, Industrial Relations Section..
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
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