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Estimating the Elasticity of Labour Supply to an Enterprise Utilizing a Quasi–Natural Experiment

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  • Torberg Falch

    ()
    (Department of Economics, Norwegian University of Science and Technology)

Abstract

This paper utilizes institutional features to identify the supply of labour directed towards individual enterprises. The labour market for Norwegian teachers is characterized by a high degree of central regulations. In the empirical period, the only variation in the wage level was determined centrally, and together with information on whether there is excess demand, this identifies the elasticity of labour supply. Using a sample selection model with fixed school effects, the estimated supply elasticity faced by the individual schools is close to unity and seems to be robust with respect to the model specification.

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File URL: http://www.svt.ntnu.no/iso/WP/2003/7teachersupply6.pdf
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Bibliographic Info

Paper provided by Department of Economics, Norwegian University of Science and Technology in its series Working Paper Series with number 3303.

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Length: 36 pages
Date of creation: 01 May 2003
Date of revision:
Handle: RePEc:nst:samfok:3303

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Web page: http://www.svt.ntnu.no/iso/WP/wp.htm
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Keywords: Labour supply elasticity; teacher supply; sample selection;

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References

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  1. John M. Abowd & Francis Kramarz & David N. Margolis, 1999. "High Wage Workers and High Wage Firms," Econometrica, Econometric Society, vol. 67(2), pages 251-334, March.
  2. Bonesronning, Hans & Falch, Torberg & Strom, Bjarne, 2005. "Teacher sorting, teacher quality, and student composition," European Economic Review, Elsevier, vol. 49(2), pages 457-483, February.
  3. Douglas O. Staiger & Joanne Spetz & Ciaran S. Phibbs, 2010. "Is There Monopsony in the Labor Market? Evidence from a Natural Experiment," Journal of Labor Economics, University of Chicago Press, vol. 28(2), pages 211-236, 04.
  4. Chamberlain, Gary, 1984. "Panel data," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 22, pages 1247-1318 Elsevier.
  5. Mortensen, Dale T. & Pissarides, Christopher A., 1999. "New developments in models of search in the labor market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 39, pages 2567-2627 Elsevier.
  6. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
  7. Richard Dickens & Stephen Machin & Alan Manning, 1994. "The Effects of Minimum Wages on Employment: Theory and Evidence from Britain," CEP Discussion Papers dp0183, Centre for Economic Performance, LSE.
  8. Daniel Sullivan, 1989. "Monopsony Power in the Market for Nurses," NBER Working Papers 3031, National Bureau of Economic Research, Inc.
  9. James M. Poterba, 1997. "Demographic structure and the political economy of public education," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 16(1), pages 48-66.
  10. Alan B. Krueger & David Card, 2000. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Reply," American Economic Review, American Economic Association, vol. 90(5), pages 1397-1420, December.
  11. William Wascher & David Neumark, 2000. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Comment," American Economic Review, American Economic Association, vol. 90(5), pages 1362-1396, December.
  12. Ekaterini Kyriazidou, 1997. "Estimation of a Panel Data Sample Selection Model," Econometrica, Econometric Society, vol. 65(6), pages 1335-1364, November.
  13. David Card & Alan B. Krueger, 1993. "Minimum Wages and Employment: A Case Study of the Fast Food Industry in New Jersey and Pennsylvania," NBER Working Papers 4509, National Bureau of Economic Research, Inc.
  14. McFadden, Daniel L., 1984. "Econometric analysis of qualitative response models," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 24, pages 1395-1457 Elsevier.
  15. William M. Boal & Michael R. Ransom, 1997. "Monopsony in the Labor Market," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 86-112, March.
  16. Nelson, Phillip, 1973. "The Elasticity of Labor Supply to the Individual Firm," Econometrica, Econometric Society, vol. 41(5), pages 853-66, September.
  17. Borge, Lars-Erik & Rattso, Jorn, 1995. "Demographic shift, relative costs and the allocation of local public consumption in Norway," Regional Science and Urban Economics, Elsevier, vol. 25(6), pages 705-726, December.
  18. Dale Mortensen, 1984. "Job Search and Labor Market Analysis," Discussion Papers 594, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  19. Greene, William H, 1981. "Sample Selection Bias as a Specification Error: Comment," Econometrica, Econometric Society, vol. 49(3), pages 795-98, May.
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Citations

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Cited by:
  1. Manning, Alan, 2011. "Imperfect Competition in the Labor Market," Handbook of Labor Economics, Elsevier.
  2. Stefan Denzler & Stefan C. Wolter, 2009. "Laufbahnentscheide im Lehrberuf aus bildungsökonomischer Sicht," Economics of Education Working Paper Series 0041, University of Zurich, Institute for Strategy and Business Economics (ISU).
  3. Torberg Falch & Bjarne Strøm, 2003. "Teacher Turnover and Non-Pecuniary Factors," Working Paper Series 3604, Department of Economics, Norwegian University of Science and Technology.
  4. G. Sulis, 2007. "What Can Monopsony Explain of the Gender Wage Differential in Italy?," Working Paper CRENoS 200713, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  5. Hans Bonesrønning & Torberg Falch & Bjarne Strøm, 2003. "Teacher Sorting, Teacher Quality, and Student Composition: Evidence from Norway," Working Paper Series 3403, Department of Economics, Norwegian University of Science and Technology.
  6. Bonesronning, Hans & Falch, Torberg & Strom, Bjarne, 2005. "Teacher sorting, teacher quality, and student composition," European Economic Review, Elsevier, vol. 49(2), pages 457-483, February.

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