Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/172354
Authors: 
Kimmel, Jean
Year of Publication: 
1993
Series/Report no.: 
Upjohn Institute Working Paper No. 93-19
Abstract: 
According to the intertemporal-substitution hypothesis, which underlies the typical empirical real business cycle model, cyclical fluctuations in employment and hours of work are optimizing labor-supply responses to short-run aggregate demand shifts. We demonstrate that previous empirical labor-supply research has used inappropriate data to test the intertemporal-substitution hypothesis. We estimate a fixed-effects life-cycle labor-supply model with more informative data, the triannual micro data of the Survey of Income and Program Participation. We find economy-wide wage elasticities of employment and hours worked per employee of +1.55 and +0.51, which support the intertemporal-substitution hypothesis and give econometric credibility to the labor-market specification of empirical real business cycle models.
Subjects: 
intertemporal-substitution
cycle
Kneisner
Kimmel
JEL: 
J2
I3
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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