Aggregating Elasticities: Intensive and Extensive Margins of Female Labour Supply

Orazio Attanasio, Hamish Low, Sánchez-Marcos, Virginia and Peter Levell
Authors registered in the RePEc Author Service: Virginia Sanchez-Marcos

No 10732, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: There is a renewed interest in the size of labour supply elasticities and the discrepancy between micro and macro estimates. Recent contributions have stressed the distinction between changes in labour supply at the extensive and the intensive margin. In this paper, we stress the importance of individual heterogeneity and aggregation problems. At the intensive margins, simple specifications that seem to fit the data give rise to non linear expressions that do not aggregate in a simple fashion. At the extensive margin, aggregate changes in participation are likely to depend on the cross sectional distribution of state variables when a shock hits and, therefore, are likely to be history dependent. We tackle these aggregation issues directly by specifying a life cycle model to explain female labour supply in the US and estimate its various components. We estimate the parameters of different component of the model. Our results indicate that (i) at the intensive margin, Marshallian and Hicksian elasticities are very heterogeneous and, on average, relatively large; (ii) Frisch elasticities are, as implied by the theory, even larger; (iii) aggregate labour supply elasticities seem to vary over the business cycle, being larger during recessions.

Keywords: Aggregation; Heterogeneity; Labour supply elasticities; Non-separability (search for similar items in EconPapers)
JEL-codes: D91 J22 (search for similar items in EconPapers)
Date: 2015-07
New Economics Papers: this item is included in nep-lma and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
https://cepr.org/publications/DP10732 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Aggregating Elasticities: Intensive and Extensive Margins of Female Labour Supply (2017)
Working Paper: Aggregating Elasticities: Intensive and Extensive Margins of Female Labour Supply (2015)
Working Paper: Aggregating Elasticities: Intensive and Extensive Margins of Female Labour Supply (2015)
Working Paper: Aggregating Elasticities: Intensive and Extensive Margins of Female Labour Supply (2015)
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:cpr:ceprdp:10732

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP10732

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().