Estimating labour supply elasticities based on cross-country micro data: A bridge between micro and macro estimates?
Markus Jantti,
Jukka Pirttilä and
Håkan Selin
Journal of Public Economics, 2015, vol. 127, issue C, 87-99
Abstract:
The Nordic model relies on high tax rates to finance an extensive welfare state. If labour supply elasticities are large, the burden of financing the model can be large even if, arguably, the practice of providing subsidised goods that support labour supply is likely to mitigate these effects. We utilise repeated cross sections of micro data from several countries, including the four major Nordic countries, available from the Luxembourg Income Study, LIS, to estimate labour supply elasticities, both at the intensive and extensive margins. The data span over four decades and include a large number of tax reform episodes, with tax rate variation arising both from cross-sectional and country-level differences. Using these data, we investigate whether micro and macro estimates differ in a systematic way. The results do not provide strong support for the view that elasticities at the macro level would be higher than the corresponding micro elasticities.
Keywords: Labour supply; Taxation; Cross-country comparisons (search for similar items in EconPapers)
JEL-codes: E24 H21 J22 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0047272714002527
Full text for ScienceDirect subscribers only
Related works:
Working Paper: Estimating Labour Supply Elasticities Based on Cross-Country Micro Data: A Bridge Between Micro and Macro Estimates? (2014) 
Working Paper: Estimating labour supply elasticities based on cross-country micro data: A bridge between micro and macro estimates? (2013) 
Working Paper: Estimating Labour Supply Elasticities Based on Cross-Country Micro Data: A Bridge between Micro and Macro Estimates? (2013) 
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:eee:pubeco:v:127:y:2015:i:c:p:87-99
DOI: 10.1016/j.jpubeco.2014.12.006
Access Statistics for this article
Journal of Public Economics is currently edited by R. Boadway and J. Poterba
More articles in Journal of Public Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().