A Shred of Credible Evidence on the Long Run Elasticity of Labor Supply

Orley Ashenfelter, Kirk Doran and Bruce Schaller
Additional contact information
Bruce Schaller: New York City Department of Transportation

No 1203, Working Papers from Princeton University, Department of Economics, Center for Economic Policy Studies.

Abstract: The available estimates of the wage elasticity of male labor supply in the literature have varied between -0.2 and 0.2, implying that permanent wage increases have relatively small, poorly determined effects on labor supplied. The variation in existing estimates calls for a simple, natural experiment in which men can change their hours of work, and in which wages have been exogenously and permanently changed. We introduce a panel data set of taxi drivers who choose their own hours, and who experienced two exogenous permanent fare increases instituted by the New York City Taxi and Limousine Commission. Our preferred estimate suggests that their elasticity of labor supply is about -0.2.

Keywords: male labor supply; effect of wage rates; long run labor supply; public policies; taxation; social safety nets; and redistribution of income; New York City Taxi and Limousine Commission; United States (search for similar items in EconPapers)
JEL-codes: E24 E27 F16 J21 J40 (search for similar items in EconPapers)
Date: 2010-01
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Citations: View citations in EconPapers (21)

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Related works:
Journal Article: A Shred of Credible Evidence on the Long‐run Elasticity of Labour Supply (2010)
Working Paper: A Shred of Credible Evidence on the Long Run Elasticity of Labor Supply (2010)
Working Paper: A Shred of Credible Evidence on the Long Run Elasticity of Labor Supply (2010)
Working Paper: A Shred of Credible Evidence on the Long Run Elasticity of Labor Supply (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pri:cepsud:199

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