Labor Supply Elasticities in Europe and the US

Files in This Item:
File Description SizeFormat 
WP11_14.pdf629.32 kBAdobe PDFDownload
Title: Labor Supply Elasticities in Europe and the US
Authors: Bargain, Olivier
Orsini, Kristian
Peichl, Andreas
Permanent link:
Date: Jul-2011
Online since: 2015-02-20T14:27:34Z
Abstract: Despite numerous studies on labor supply, the size of elasticities is rarely comparable across countries. In this paper, we suggest the first large-scale international comparison of elasticities, while netting out possible differences due to methods, data selection and the period of investigation. We rely on comparable data for 17 European countries and the US, a common empirical approach and a complete simulation of tax-benefit policies affecting household budgets. We find that wage-elasticities are small and vary less across countries than previously thought, e.g., between .2 and .6 for married women. Results are robust to several modeling assumptions. We show that differences in tax-benefit systems or demographic compositions explain little of the cross-country variation, leaving room for other interpretations, notably in terms of heterogeneous work preferences. We derive important implications for research on optimal taxation.
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Start page: 1
End page: 44
Series/Report no.: UCD Centre for Economic Research Working Paper Series; WP11/14
Keywords: Household labor supplyElasticityTaxationEuropeUS
Other versions:
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

Show full item record

Google ScholarTM


This item is available under the Attribution-NonCommercial-NoDerivs 3.0 Ireland. No item may be reproduced for commercial purposes. For other possible restrictions on use please refer to the publisher's URL where this is made available, or to notes contained in the item itself. Other terms may apply.