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Taxes, benefits and labour force participation: A survey of the quasi-experimental literature

Jacob Lundberg () and John Norell
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Jacob Lundberg: Timbro, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden
John Norell: Timbro, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden

No 313, Ratio Working Papers from The Ratio Institute

Abstract: We review the literature that uses quasi-experimental methods to estimate the elasticity of labour force participation with respect to the financial gain from work. We find a wide range of elasticities, with an average of 0.38. 26 out of 31 papers find elasticities larger than 0.1, providing strong evidence that individuals respond to incentives on the extensive margin of labour supply. Elasticities are larger for women and older workers, and have declined over time.

Keywords: participation elasticity; quasi-experimental methods; labour supply; extensive margin (search for similar items in EconPapers)
JEL-codes: H24 J22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp, nep-lma, nep-pbe and nep-pub
Date: 2018-10-19
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:ratioi:0313

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