Job Changes and Hours Changes: Understanding the Path of Labour Supply Adjustment

Richard Blundell (), Mike Brewer () and Marco Francesconi ()

No 3044, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: This paper uses British panel data to investigate single women’s labour supply changes in response to three tax and benefit policy reforms that occurred in the 1990s. These reforms changed individuals’ work incentives and we use them to identify changes in labour supply. We find evidence of small hours of work effects for two of such reforms. A third reform in 1999 instead led to a significant increase in single mothers’ hours of work. The mechanism by which the labour supply adjustments were made occurred largely through job changes rather than hours changes with the same employer. These results are confirmed when we look at hours changes by stated labour supply preferences. Finally, we find little overall effect of the reforms on wages.

Keywords: job mobility; hours flexibility; labour supply preferences; hours-wage trade-off; monopsony (search for similar items in EconPapers)
JEL-codes: C23 H31 I38 J12 J13 J22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab and nep-ltv
Date: 2007-09
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Journal Article: Job Changes and Hours Changes: Understanding the Path of Labor Supply Adjustment (2008)
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