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Grodner, Andrew
Kniesner, Thomas J.
Year of Publication: 
Series/Report no.: 
IZA Discussion Papers 3034
Our econometric research allows for a possible response of a person's hours worked to hours typically worked by members of a multidimensional labor market reference group that considers demographics and geographic location. Instrumental variables estimates of the canonical labor supply model expanded to permit social interactions pass a battery of specification checks and indicate positive and economically important spillovers for adult men. Ignoring or incorrectly considering social interactions in male labor supply can mis-estimate the response to tax reform by as much as 60 percent.
Labor supply
social interactions
reference group
instrumental variables
social multiplier
Document Type: 
Working Paper

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