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Assessing Hypothetical Scenarios for Estimating Labor Supply Responses: Evidence from a Pension Reform

Author

Listed:
  • Nicola Fuchs-Schündeln
  • Jonas Jessen
  • Pinchuan Ong
  • Jessica Pan

Abstract

We assess whether survey responses to hypothetical policy scenarios can recover actual labor supply responses from policy variation. We study the German Mütterrente, a pension benefit crediting parents for child-rearing, benchmarking against Artmann et al. (forthcoming). Surveying mothers and fathers about a hypothetical reform modeled on that expansion, we find that mothers expect to reduce their labor supply, with an implied marginal propensity to earn of −0.65—close to the quasi-experimental estimate of −0.54. The response is sensible across subgroups, falls mainly on the extensive margin, and spills over to fathers. In the aggregate, spousal predictions match partners’ own reports.

Suggested Citation

  • Nicola Fuchs-Schündeln & Jonas Jessen & Pinchuan Ong & Jessica Pan, 2026. "Assessing Hypothetical Scenarios for Estimating Labor Supply Responses: Evidence from a Pension Reform," CESifo Working Paper Series 12993, CESifo.
    • Handle: RePEc:ces:ceswps:_12993
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    References listed on IDEAS

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    1. Richard Blundell & Alan Duncan & Julian McCrae & Costas Meghir, 2000. "The labour market impact of the working families’ tax credit," Fiscal Studies, Institute for Fiscal Studies, vol. 21(1), pages 75-103, March.
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    3. Arthur van Soest, 1995. "Structural Models of Family Labor Supply: A Discrete Choice Approach," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 63-88.
    4. Maria Perozek, 2008. "Using subjective expectations to forecast longevity: do survey respondents know something we don’t know?," Demography, Springer;Population Association of America (PAA), vol. 45(1), pages 95-113, February.
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    Keywords

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    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • D10 - Microeconomics - - Household Behavior - - - General

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