EconPapers    
Economics at your fingertips  
 

What Do Participation Fluctuations Tell Us About Labor Supply Elasticities?

Christian Haefke () and Michael Reiter ()

No 6039, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In this paper we use information on the cyclical variation of labor market participation to learn about the aggregate labor supply elasticity. For this purpose, we extend the standard labor market matching model to allow for endogenous participation. A model that is calibrated to replicate the variability of unemployment and participation, and the negative correlation of unemployment and GDP, implies an aggregate labor supply elasticity along the extensive margin of around 0.3 for men and 0.5 for women. This is in line with recent micro-econometric estimates.

Keywords: matching models; labor market participation; labor supply elasticity (search for similar items in EconPapers)
JEL-codes: E24 E32 J21 J64 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-lab, nep-lma and nep-mac
Date: 2011-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14) Track citations by RSS feed

Downloads: (external link)
http://ftp.iza.org/dp6039.pdf (application/pdf)

Related works:
Working Paper: What Do Participation Fluctuations Tell Us About Labor Supply Elasticities? (2012) Downloads
Working Paper: What Do Participation Fluctuations Tell Us About Labor Supply Elasticities? (2012) Downloads
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:iza:izadps:dp6039

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().

 
Page updated 2019-11-12
Handle: RePEc:iza:izadps:dp6039