Aggregating Labour Supply and Feedback Effects in Microsimulation

John Creedy and Alan Duncan

Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne

Abstract: This paper extends behavioural microsimulation modelling so that third round effects of a policy change can be simulated. The Þrst round effects relate to fixed hours of work, while second round effects allow for changes in desired hours of work at unchanged wages. These allow for endogenous changes to the distribution of wage rates resulting from the labour supply responses to tax changes. This is achieved using the concept of an aggregate supply response schedule., which identiÞes the extent to which average labour supply responds to a proportional change in wage rates. The third round effect is obtained after re-running a microsimulation model with a suitable modification to individuals. wage rates. The method is illustrated using the MITTS behavioural microsimulation model.

Pages: 27 pages
Date: 2001-11
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Citations: View citations in EconPapers (8)

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http://melbourneinstitute.unimelb.edu.au/downloads ... series/wp2001n15.pdf (application/pdf)

Related works:
Journal Article: Aggregating Labour Supply and Feedback Effects in Microsimulation (2005)
Working Paper: Aggregating labour supply and feedback effects in microsimulation (2001)
Working Paper: AGGREGATING LABOUR SUPPLY AND FEEDBACK EFFECTS IN MICROSIMULATION (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:iae:iaewps:wp2001n15

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