What Explains the Variation in Estimates of Labour Supply Elasticities?

Tinbergen Institute Discussion Paper No. 06-017/3

27 Pages Posted: 24 Feb 2006

See all articles by Michiel Evers

Michiel Evers

Erasmus University Rotterdam (EUR)

Ruud A. De Mooij

International Monetary Fund (IMF); CESifo (Center for Economic Studies and Ifo Institute); Oxford University Centre for Business Taxation

Daniel J. van Vuuren

CPB Netherlands Bureau of Economic Policy Analysis

Date Written: February 2006

Abstract

This paper performs a meta-analysis of empirical estimates of uncompensated labour supply elasticities. We find that much of the variation in elasticities can be explained by the variation in gender, participation rates, and country fixed effects. Country differences appear to be small though. There is no systematic impact of the model specification or marital status on reported elasticities. The decision to participate is more responsive than is the decision regarding hours worked. Even at the intensive margin, we find that the elasticity for women exceeds that for men. For men and women in the Netherlands, we predict an uncompensated labour supply elasticity of 0.1 (or 0.2 if an alternative specification is preferred) and 0.5, respectively. These values are robust for alternative samples and specifications of the meta regression.

Keywords: labour supply, meta analysis, uncompensated elasticity

JEL Classification: J22, H2

Suggested Citation

Evers, Michiel and De Mooij, Ruud A. and van Vuuren, Daniel J., What Explains the Variation in Estimates of Labour Supply Elasticities? (February 2006). Tinbergen Institute Discussion Paper No. 06-017/3. Available at SSRN: https://ssrn.com/abstract=884430 or http://dx.doi.org/10.2139/ssrn.884430

Michiel Evers (Contact Author)

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

Ruud A. De Mooij

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Oxford University Centre for Business Taxation ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

HOME PAGE: http://people.few.eur.nl/demooij/

Daniel J. van Vuuren

CPB Netherlands Bureau of Economic Policy Analysis ( email )

P.O. Box 80510
2508 GM The Hague, 2585 JR
Netherlands

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