Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/123494
Authors: 
Søgaard, Jakob Egholt
Year of Publication: 
2014
Series/Report no.: 
EPRU Working Paper Series 2014-02
Abstract: 
In this paper I investigate the nature of optimization frictions by studying the labor market of Danish students. This particular labor market is an interesting case study as it features a range of special institutional settings that affect students' incentive to earn income and comparing outcomes across these setting effectively allow you to distinguish between different types of frictions. I find that the considered labor market is significantly affected by optimizations frictions, which masks the bunching at kink points normally associated with a positive labor supply elasticity under standard theory. More concretely I find the dominate optimization friction to be individuals' inattention about their earnings during the year, while real adjustment cost and gradual learning appears to be of less importance.
Subjects: 
optimization frictions
labor supply
bunching
inattention
student labor market
JEL: 
H21
H24
J22
Document Type: 
Working Paper

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