Substitution Over Time: Another Look at Life Cycle Labor Supply

62 Pages Posted: 24 Jul 1999 Last revised: 9 Oct 2010

See all articles by Casey B. Mulligan

Casey B. Mulligan

University of Chicago; National Bureau of Economic Research (NBER)

Date Written: May 1998

Abstract

Most studies of the intertemporal substitution of work use life cycle data and, from those studies, many have concluded that intertemporal labor substitution is unimportant for macroeconomics. This paper takes another look at life cycle data and argues that a consideration of measurement errors, taxes, on-the-job training the margins' composing aggregate labor supply over the life cycle suggests that substitution over time may be very important for macro fluctuations. The life cycle data used includes fairly standard male cross-section and panel data samples as well as a sample of women experiencing the termination of AFDC benefits as their youngest child turns 18 years old.

Suggested Citation

Mulligan, Casey B., Substitution Over Time: Another Look at Life Cycle Labor Supply (May 1998). NBER Working Paper No. w6585. Available at SSRN: https://ssrn.com/abstract=160713

Casey B. Mulligan (Contact Author)

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