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Estimating labour supply elasticities based on cross-country micro data: A bridge between micro and macro estimates?

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Author Info

  • Jäntti, Markus

    ()
    (Swedish Institute for Social Research)

  • Pirttilä, Jukka

    ()
    (School of Management)

  • Selin, Håkan

    ()
    (Uppsala Center for Fiscal Studies)

Abstract

We utilise repeated cross sections of micro data from several countries, available from the Luxembourg Income Study, LIS, to estimate labour supply elasticities, both at the intensive and extensive margin. The benefit of the data is that it spans over four decades and includes a large number of tax reform episodes, with tax rate variation arising both from cross-sectional and country-level differences. Using these data, we investigate whether micro and macro estimates differ in a systematic way. The results do not provide clear support to the view that elasticities at the macro level would be higher than corresponding micro elasticities.

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Bibliographic Info

Paper provided by Uppsala University, Department of Economics in its series Working Paper Series, Center for Fiscal Studies with number 2013:1.

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Length: 35 pages
Date of creation: 16 Jan 2013
Date of revision:
Handle: RePEc:hhs:uufswp:2013_001

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Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
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Web page: http://www.nek.uu.se/
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Keywords: Labour supply; earnings; taxation; cross-country comparisons;

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  19. Martin Feldstein, 1993. "The Effect of Marginal Tax Rates on Taxable Income: A Panel Study of the1986 Tax Reform Act," NBER Working Papers 4496, National Bureau of Economic Research, Inc.
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Cited by:
  1. Valentina Bosetti & Marco Maffezzoli, 2014. "Occasionally binding emission caps and real business cycles," Working Papers 523, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.

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