Aggregating Labour Supply and Feedback Effects in Microsimulation
AbstractThis paper extends behavioural microsimulation modelling so that third round effects of a policy change can be simulated. The Þrst round effects relate to fixed hours of work, while second round effects allow for changes in desired hours of work at unchanged wages. These allow for endogenous changes to the distribution of wage rates resulting from the labour supply responses to tax changes. This is achieved using the concept of an aggregate supply response schedule., which identiÞes the extent to which average labour supply responds to a proportional change in wage rates. The third round effect is obtained after re-running a microsimulation model with a suitable modification to individuals. wage rates. The method is illustrated using the MITTS behavioural microsimulation model.
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Bibliographic InfoPaper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2001n15.
Length: 27 pages
Date of creation: Nov 2001
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Other versions of this item:
- John Creedy & Alan Duncan, 2005. "Aggregating Labour Supply and Feedback Effects in Microsimulation," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 8(3), pages 277-290, September.
- John Creedy & Alan Duncan, 2001. "Aggregating Labour Supply And Feedback Effects In Microsimulation," Department of Economics - Working Papers Series 823, The University of Melbourne.
- John Creedy & Alan Duncan, 2001. "Aggregating labour supply and feedback effects in microsimulation," IFS Working Papers W01/24, Institute for Fiscal Studies.
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
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