A structural analysis of labour supply elasticities in the Netherlands

Nicole Bosch, Miriam Gielen, Egbert Jongen, Mauro Mastrogiacomo (dnb and Voorheen Cpb)

No 235, CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: We estimate the labour supply elasticity for a large number of groups on the Dutch labour market. We exploit a large administrative household panel data set for the period 1999-2005. The idenfication of the parameters benefits from the large 2001 Dutch tax reform that led to substantial exogenous variation in household budget constraints. Read also the accompanying attachment below, with supplementary material. For couples we find that men have much smaller elasticities than women, in particular when children are present. Furthermore, cross elasticities of men's wages on women's labour supply in couples are non-negligible. When they are single, men and women have similar labour supply elasticities. The elasticity is relatively high for single parents with small children, but much lower for single parents with children in secondary school. Low skilled singles and single parents have much higher labour supply elasticities than their high skilled counterparts. Differences by skill are less pronounced for couples. For all groups, the decision whether to participate or not is much more responsive to nancial incentives than the hours per week decision.

JEL-codes: C25 C52 H31 J22 (search for similar items in EconPapers)
Date: 2013-03
New Economics Papers: this item is included in nep-dem, nep-lab and nep-lma
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Citations: View citations in EconPapers (12)

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