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Intertemporal labor supply and involuntary unemployment

  • Peter Haan

    ()

  • Arne Uhlendorff

    ()

We estimate a model of intertemporal male labor supply behavior which explicitly accounts for the effect of income taxation and the transfer system. Moreover, we model the demand-side driven rationing risk that prevents agents from choosing the optimal labor supply state. Our results show that elasticities derived in an unconstrained pure choice model are significantly higher compared to a model with involuntary unemployment. This holds true for short-run and long-run labor supply elasticities. Copyright Springer-Verlag 2013

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File URL: http://hdl.handle.net/10.1007/s00181-012-0563-7
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Article provided by Springer in its journal Empirical Economics.

Volume (Year): 44 (2013)
Issue (Month): 2 (April)
Pages: 661-683

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Handle: RePEc:spr:empeco:v:44:y:2013:i:2:p:661-683
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