Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/195034 
Year of Publication: 
2016
Citation: 
[Journal:] IZA Journal of Labor Economics [ISSN:] 2193-8997 [Volume:] 5 [Issue:] 10 [Publisher:] Springer [Place:] Heidelberg [Year:] 2016 [Pages:] 1-31
Publisher: 
Springer, Heidelberg
Abstract: 
There is a huge variation in the size of labor supply elasticities in the literature, which hampers policy analysis. While recent studies show that preference heterogeneity across countries explains little of this variation, we focus on two other important features: observation period and estimation method. We start with a thorough survey of existing evidence for both Western Europe and the USA, over a long period and from different empirical approaches. Then, our meta-analysis attempts to disentangle the role of time changes and estimation methods. We highlight the key role of time changes, documenting the incredible fall in labor supply elasticities since the 1980s not only for the USA but also in the EU. In contrast, we find no compelling evidence that the choice of estimation method explains variation in elasticity estimates. From our analysis, we derive important guidelines for policy simulations.
Subjects: 
Household labor supply
Elasticity
Taxation
Europe
USA
JEL: 
C25
C52
H31
J22
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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