Labour supply responses to financial wealth shocks: evidence from Italy

Renata Bottazzi, Serena Trucchi and Matthew Wakefield

Fiscal Studies, 2021, vol. 42, issue 2, 291-317

Abstract: We look at how strongly shocks to wealth affect labour supply, using Italian data. We use asset price shocks to provide a measure of wealth changes that is exogenous to the household's saving and labour supply. Results point to significant effects of wealth on hours of work, whether agents leave their jobs and labour earnings. The magnitude of these effects can be substantial – for example, for individuals who suffered larger wealth losses during the financial crisis. Responses are similar for men and women on average, but older working‐age individuals have relatively strong responses that drive the population results. Short‐run effects are somewhat persistent.

Date: 2021
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https://doi.org/10.1111/1475-5890.12254

Related works:
Working Paper: Labour Supply Responses to Financial Wealth Shocks: Evidence from in Italy (2019)
Working Paper: Labour supply responses to financial wealth shocks: evidence from Italy (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:fistud:v:42:y:2021:i:2:p:291-317

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