The available estimates of the wage elasticity of male labor supply in the literature have varied between -0.2 and 0.2, implying that permanent wage increases have relatively small, poorly determined effects on labor supplied. The variation in existing estimates calls for a simple, natural experiment in which men can change their hours of work, and in which wages have been exogenously and permanently changed. We introduce a panel data set of taxi drivers who choose their own hours, and who experienced two exogenous permanent fare increases instituted by the New York City Taxi and Limousine Commission. Our preferred estimate suggests that their elasticity of labor supply is about -0.2.
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Paper provided by Princeton University, Department of Economics, Industrial Relations Section. in its series Working Papers with number
1180.
Find related papers by JEL classification: J01 - Labor and Demographic Economics - - General - - - Labor Economics: General J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure J40 - Labor and Demographic Economics - - Particular Labor Markets - - - General J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
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