Download This PaperFrom Individual to Aggregate Labor Supply: A Quantitative Analysis Based on a Heterogeneous-Agent Macroeconomy
38 Pages Posted: 23 Jul 2002
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From Individual to Aggregate Labor Supply: A Quantitative Analysis Based on a Heterogeneous-Agent Macroeconomy
From Individual to Aggregate Labor Supply: A Quantitative Analysis Based on a Heterogeneous Agent Macroeconomy
Date Written: July 2, 2002
Abstract
We investigate the mapping from individual to aggregate labor supply using a general equilibrium heterogeneous-agent model with incomplete market. Heterogeneity of the workforce is designed such that the evolution of wages, worker flows between employment and nonemployment, and cross-sectional earnings distribution are consistent with micro data. We find that the aggregate labor-supply elasticity of such an economy is around 1, bigger than micro estimates but smaller than those often assumed in aggregate models.
Keywords: Aggregate Labor-Supply Elasticity, Heterogeneity, Indivisible Labor
JEL Classification: E24, E32, J21, J22
Suggested Citation: Suggested Citation
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