To Work or Not to Work? Estimates of Labour Supply Elasticities
AbstractThis paper provides a microeconometric analysis of extensive margin labour supply elasticities in Slovakia. We find that a one percent increase in net wage increases the probability of economic activity by 0.263 percentage points. Taking into account tax and transfer system details valid in 2009-2011, a one percent increase in transfers decreases the semi-elasticity of labour force participation by 0.04 percentage points. These results are broadly in line with the elasticities usually reported in the literature. Our results show that low-skilled, females and the elderly are the groups that are particularly responsive to changes in taxes and transfers. Labour market policies aimed to boost employment should concentrate on increasing marginal gains to work, especially for low-educated individuals and women.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Council for Budget Responsibility in its series Working Papers with number Working Paper No. 1/2014.
Length: 32 pages
Date of creation: Jan 2014
Date of revision:
Contact details of provider:
Postal: Imricha Karvasa 1, 813 25 Bratislava
Phone: ++421/2/5787 4959
Web page: http://www.rozpoctovarada.sk/eng/rozpocet/151/working-papers
More information through EDIRC
labour supply elasticity; extensive margin; Heckman model; probit;
Other versions of this item:
- Zuzana Siebertova & Matus Senaj & Norbert Svarda & Jana Valachyova, 2013. "To Work or Not to Work? Estimates of Labour Supply Elasticities," Working and Discussion Papers WP 5/2013, Research Department, National Bank of Slovakia.
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
- I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Raj Chetty & Adam Guren & Day Manoli & Andrea Weber, 2012.
"Does Indivisible Labor Explain the Difference between Micro and Macro Elasticities? A Meta-Analysis of Extensive Margin Elasticities,"
in: NBER Macroeconomics Annual 2012, Volume 27, pages 1-56
National Bureau of Economic Research, Inc.
- Raj Chetty & Adam Guren & Day Manoli & Andrea Weber, 2013. "Does Indivisible Labor Explain the Difference between Micro and Macro Elasticities? A Meta-Analysis of Extensive Margin Elasticities," NBER Macroeconomics Annual, University of Chicago Press, vol. 27(1), pages 1 - 56.
- Day Manoli & Andrea Weber & Adam Guren & Raj Chetty, 2011. "Does Indivisible Labor Explain the Difference between Micro and Macro Elasticities? A Meta-Analysis of Extensive Margin Elasticities," 2011 Meeting Papers 73, Society for Economic Dynamics.
- Raj Chetty & Adam Guren & Dayanand S. Manoli & Andrea Weber, 2011. "Does Indivisible Labor Explain the Difference Between Micro and Macro Elasticities? A Meta-Analysis of Extensive Margin Elasticities," NBER Working Papers 16729, National Bureau of Economic Research, Inc.
- Alena Bicakova & Jiri Slacalek & Michal Slavik, 2008.
"Labor Supply after Transition: Evidence from the Czech Republic,"
CERGE-EI Working Papers
wp351, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
- Alena Bièáková & Jiøí Slaèálek & Michal Slavík, 2011. "Labor Supply after Transition: Evidence from the Czech Republic," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 61(4), pages 327-347, August.
- Bičáková, Alena & Slacalek, Jiri & Slavík, Michal, 2008. "Labor supply after transition: evidence from the Czech Republic," Working Paper Series 0887, European Central Bank.
- Bargain, Olivier & Orsini, Kristian & Peichl, Andreas, 2012.
"Comparing Labor Supply Elasticities in Europe and the US: New Results,"
IZA Discussion Papers
6735, Institute for the Study of Labor (IZA).
- Olivier Bargain & Kristian Orsini & Andreas Peichl, 2012. "Comparing Labor Supply Elasticities in Europe and the US: New Results," Working Papers halshs-00805736, HAL.
- Olivier Bargain & Kristian Orsini & Andreas Peichl, 2012. "Comparing Labor Supply Elasticities in Europe and the US: New Results," SOEPpapers on Multidisciplinary Panel Data Research 525, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Olivier Bargain & Christina Orsini & Andreas Peichl, 2013. "Comparing Labor Supply Elasticities in Europe and the US: New Results," AMSE Working Papers 1321, Aix-Marseille School of Economics, Marseille, France.
- Kimmel, Jean & Kniesner, Thomas J., 1998. "New evidence on labor supply:: Employment versus hours elasticities by sex and marital status," Journal of Monetary Economics, Elsevier, vol. 42(2), pages 289-301, July.
- Robert Breunig & Joseph Mercante, 2010.
"The Accuracy of Predicted Wages of the Non-Employed and Implications for Policy Simulations from Structural Labour Supply Models,"
The Economic Record,
The Economic Society of Australia, vol. 86(272), pages 49-70, 03.
- Robert Breunig & Joseph Mercante, 2009. "The accuracy of predicted wages of the non-employed and implications for policy simulations from structural labour supply models," Treasury Working Papers 2009-03, Treasury, Australian Government, revised Mar 2009.
- Gábor Kátay & Péter Benczúr & Áron Kiss & Olivér M. Rácz, 2014.
"Income Taxation, Transfers and Labour Supply at the Extensive Margin,"
- Benczúr, P. & Kátay, G. & Kiss, A. & Rácz , O., 2014. "Income Taxation, Transfers and Labour Supply at the Extensive Margin," Working papers 487, Banque de France.
- Heckman, James J, 1993. "What Has Been Learned about Labor Supply in the Past Twenty Years?," American Economic Review, American Economic Association, vol. 83(2), pages 116-21, May.
- Chase, R.S., 1995. "Women's Labor Force Participation During and After Communism: A Case Study of the Czech Republic and Slovakia," Papers 768, Yale - Economic Growth Center.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.