Comparing Labor Supply Elasticities in Europe and the United States: New Results

Olivier Bargain, Kristian Orsini () and Andreas Peichl

Journal of Human Resources, 2014, vol. 49, issue 3

Abstract: We suggest the first large-scale international comparison of labor supply elasticities for 17 European countries and the United States using a harmonized empirical approach. We find that own-wage elasticities are relatively small and more uniform across countries than previously considered. Nonetheless, such differences do exist, and are found not to arise from different tax-benefit systems, wage/hour levels, or demographic compositions across countries, suggesting genuine differences in work preferences across countries. Furthermore, three other findings are consistent across countries: The extensive margin dominates the intensive margin; for singles, this leads to larger responses in low-income groups; and income elasticities are extremely small.

Date: 2014
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Related works:
Working Paper: Comparing Labor Supply Elasticities in Europe and the United States: New Results (2014)
Working Paper: Comparing Labor Supply Elasticities in Europe and the US: New Results (2012)
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