Accounting for Labor Gaps

Francois Langot and Alessandra Pizzo

Working papers from Banque de France

Abstract: In this paper we develop a balanced growth model with labor supply and search and matching frictions in the labor market, to study the impact of economic policy variables on the two margins which constitute the (total) labor input: the extensive margin (the rate of employment) and the intensive margin (the hours worked per worker). We show that the dynamics of taxes primarily have an impact on hours worked, while labor market institutions have a significant influence on the rate of employment. However, our findings emphasize that there is an interaction between the two margins. The model is tested on four countries (US, France, Germany and the UK), which have experienced different tax and labor market dynamics since the sixties. Using this structural approach, we can then perform counterfactual experiments about the evolution of the policy variables, and compare the implications of policy changes in terms of production as well as average welfare.

Keywords: Taxes; labor market institutions; hours; employment; labor market search. (search for similar items in EconPapers)
JEL-codes: E20 E60 J22 J60 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2016
New Economics Papers: this item is included in nep-dge, nep-lma and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://publications.banque-france.fr/sites/defaul ... g-paper_584_2016.pdf (application/pdf)

Related works:
Journal Article: Accounting for labor gaps (2019)
Working Paper: Accounting for labor gaps (2019)
Working Paper: Accounting for labor gaps (2019)
Working Paper: Accounting for Labor Gaps (2018)
Working Paper: Accounting for Labor Gaps (2018)
Working Paper: Accounting for Labor GAPS (2015)
Working Paper: Accounting for Labor Gaps (2015)
Working Paper: Accounting for Labor Gaps (2015)
Working Paper: Accounting for Labor Gaps (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:584

Access Statistics for this paper

More papers in Working papers from Banque de France Banque de France 31 Rue Croix des Petits Champs LABOLOG - 49-1404 75049 PARIS. Contact information at EDIRC.
Bibliographic data for series maintained by Michael brassart ().