Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/153321
Authors: 
Bičáková, Alena
Slacalek, Jiri
Slavík, Michal
Year of Publication: 
2008
Series/Report no.: 
ECB Working Paper 887
Abstract: 
We extend the scarce evidence on labor supply in post-transition countries by estimating the wage elasticity of labor force participation in the Czech Republic. Using the household income survey data of 2002, we find that a one-percent rise in the gross wage increases the probability of working by 0.16 and 0.02 percentage points for women and men, respectively. Taking into account the tax and benefit system, these semi-elasticities fall to 0.06 for women and 0.01 for men. We interpret the difference between the estimates from the two specifications as a summary measure of the welfare system disincentives. The estimated wage elasticities lie at the lower end of the range of values reported for mature market economies. This finding is consistent with the stylized fact that the labor supply in countries with high labor force participation rates, such as in the Czech Republic, tends to be less sensitive to wages.
Subjects: 
Labor supply
Transition
welfare system
JEL: 
J22
J31
P30
Document Type: 
Working Paper

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