The own-wage elasticity of labor demand: A meta-regression analysis

Andreas Lichter, Andreas Peichl and Sebastian Siegloch

European Economic Review, 2015, vol. 80, issue C, 94-119

Abstract: The own-wage elasticity of labor demand is a key parameter in empirical research and policy analysis. However, despite extensive research, estimates of labor demand elasticities are subject to considerable heterogeneity. In this paper, we explore various dimensions of this heterogeneity by means of a comprehensive meta-regression analysis, building on information from 151 different studies containing 1334 estimates in total. Our results show that heterogeneity in the estimates of the elasticity is natural to a considerable extent: the magnitude of the elasticity depends on the theoretical model applied and features of the workforce. Moreover, we find that labor demand has become more elastic over time, and is particularly elastic in countries with low levels of employment protection legislation. Furthermore, we find heterogeneity due to the empirical specification of the labor demand model, characteristics of the dataset and publication bias.

Keywords: Labor demand; Wage elasticity; Meta-analysis (search for similar items in EconPapers)
JEL-codes: C10 C83 J23 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (131)

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Related works:
Working Paper: The Own-Wage Elasticity of Labor Demand: A Meta-Regression Analysis (2014)
Working Paper: The own-wage elasticity of labor demand: A meta-regression analysis (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:80:y:2015:i:c:p:94-119

DOI: 10.1016/j.euroecorev.2015.08.007

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