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

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Author Info
Torberg Falch () (Department of Economics, Norwegian University of Science and Technology)

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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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Publisher 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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Related research
Keywords: Labour supply elasticity teacher supply sample selection

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Find related papers by JEL classification:
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models
I29 - Health, Education, and Welfare - - Education - - - Other
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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References listed on IDEAS
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.:
  1. 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. [Downloadable!] (restricted)
  2. Daniel Sullivan, 1989. "Monopsony Power in the Market for Nurses," NBER Working Papers 3031, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. 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. [Downloadable!] (restricted)
  4. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January. [Downloadable!] (restricted)
  5. Ekaterini Kyriazidou, 1997. "Estimation of a Panel Data Sample Selection Model," Econometrica, Econometric Society, vol. 65(6), pages 1335-1364, November.
  6. Nelson, Phillip, 1973. "The Elasticity of Labor Supply to the Individual Firm," Econometrica, Econometric Society, vol. 41(5), pages 853-66, September. [Downloadable!] (restricted)
  7. Dickens, Richard & Machin, Stephen & Manning, Alan, 1999. "The Effects of Minimum Wages on Employment: Theory and Evidence from Britain," Journal of Labor Economics, University of Chicago Press, vol. 17(1), pages 1-22, January. [Downloadable!] (restricted)
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  8. Greene, William H, 1981. "Sample Selection Bias as a Specification Error: Comment," Econometrica, Econometric Society, vol. 49(3), pages 795-98, May. [Downloadable!] (restricted)
  9. James M. Poterba, 1996. "Demographic Structure and the Political Economy of Public Education," NBER Working Papers 5677, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Sullivan, Daniel, 1989. "Monopsony Power in the Market for Nurses," Journal of Law & Economics, University of Chicago Press, vol. 32(2), pages S135-78, October.
  11. Mortensen, Dale T & Pissarides, Christopher, 1999. "New Developments in Models of Search in the Labour Market," CEPR Discussion Papers 2053, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  12. 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. [Downloadable!] (restricted)
  13. 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.
    Other versions:
  14. David Card & Alan B. Krueger, 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. [Downloadable!] (restricted)
  15. Dale Mortensen, 1984. "Job Search and Labor Market Analysis," Discussion Papers 594, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
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  16. David Neumark & William Wascher, 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. [Downloadable!] (restricted)
  17. Douglas Staiger & Joanne Spetz & Ciaran Phibbs, 1999. "Is There Monopsony in the Labor Market? Evidence from a Natural Experiment," NBER Working Papers 7258, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  18. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-93, September. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, 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.)

  1. 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. [Downloadable!]
  2. Giovanni 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. [Downloadable!]
  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. [Downloadable!]
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