The Own-Wage Elasticity of Labor Demand: A Meta-Regression Analysis

Andreas Lichter (), Andreas Peichl and Sebastian Siegloch
Additional contact information
Andreas Lichter: Technical University Dortmund

No 7958, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Firms' labor demand responses to wage changes are of key interest in empirical research and policy analysis. However, despite extensive research, estimates of labor demand elasticities remain subject to considerable heterogeneity. In this paper, we conduct a comprehensive meta-regression analysis to re-assess the empirical literature on labor demand elasticities. Building on 942 elasticity estimates from 105 different studies, we identify sources of variation in the absolute value of this elasticity. Heterogeneity due to the theoretical and empirical specification of the labor demand model, different datasets used or sectors and countries considered explains more than 80% of the variation in the estimates. We further find substantial evidence for the presence of publication selection bias, as estimates of the own-wage elasticity of labor demand are upwardly inflated.

Keywords: labor demand; wage elasticity; meta-analysis (search for similar items in EconPapers)
JEL-codes: C10 C83 J23 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2014-02
New Economics Papers: this item is included in nep-lab, nep-lma and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Published - revised version published in: European Economic Review, 2015, 80, 94-119

Downloads: (external link)
https://docs.iza.org/dp7958.pdf (application/pdf)

Related works:
Journal Article: The own-wage elasticity of labor demand: A meta-regression analysis (2015)
Working Paper: The own-wage elasticity of labor demand: A meta-regression analysis (2014)
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:iza:izadps:dp7958

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().