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Estimates of Labor-Supply Elasticities with Joint Borrowing Constraints of Couples

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  • Gravert, Jan Hendrik
  • Bredemeier, Christian
  • Jüßen, Falko

Abstract

Estimates of Frisch labor-supply elasticities are larger for women than for men. We show that standard labor-supply regressions tend to overestimate this gender difference. In couples with joint borrowing constraints, wage-rate fluctuations of the secondary earner are less important for the couples willingness to borrow. This results in smaller estimation biases for secondary earners which are mostly women, empirically. Quantitatively, our results suggest that the gender difference in true Frisch elasticities is about a fifth smaller than reported reviously.

Suggested Citation

  • Gravert, Jan Hendrik & Bredemeier, Christian & Jüßen, Falko, 2015. "Estimates of Labor-Supply Elasticities with Joint Borrowing Constraints of Couples," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113115, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc15:113115
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    References listed on IDEAS

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    6. David Domeij & Martin Floden, 2006. "The Labor-Supply Elasticity and Borrowing Constraints: Why Estimates are Biased," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 9(2), pages 242-262, April.
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    Cited by:

    1. Bredemeier, Christian, 2019. "Gender Gaps in Pay and Inter-Firm Mobility," IZA Discussion Papers 12785, Institute of Labor Economics (IZA).
    2. Christian Bredemeier, 2015. "Household Specialization and the Labor-Supply Elasticities of Women and Men," Working Paper Series in Economics 81, University of Cologne, Department of Economics.

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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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