From individual to aggregate labor supply: a quantitative analysis based on a heterogeneous agent macroeconomy

Yongsung Chang and Sun-Bin Kim

No 03-05, Working Paper from Federal Reserve Bank of Richmond

Abstract: We investigate the mapping from individual to aggregate labor supply using a general equilibrium heterogeneous-agent model with an incomplete market. The nature of heterogeneity among workers is calibrated using wage data from the PSID. The gross worker flows between employment and nonemployment and the cross-sectional earnings and wealth distributions in our model are comparable to those in the micro data. We find that the aggregate labor supply elasticity of such an economy is around 1, bigger than micro estimates but smaller than those often assumed in aggregate models.

Keywords: Equilibrium (Economics); Employment (search for similar items in EconPapers)
Date: 2003
New Economics Papers: this item is included in nep-dge and nep-mac
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Citations: View citations in EconPapers (42)

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Related works:
Journal Article: FROM INDIVIDUAL TO AGGREGATE LABOR SUPPLY: A QUANTITATIVE ANALYSIS BASED ON A HETEROGENEOUS AGENT MACROECONOMY * (2006)
Working Paper: From Individual to Aggregate Labor Supply: A Quantitative Analysis Based on a Heterogeneous Agent Macroeconomy (2003)
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