The Own-Wage Elasticity of Labor Demand: A Meta-Regression Analysis
Andreas Lichter (),
Andreas Peichl () and
Sebastian Siegloch ()
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Andreas Lichter: Heinrich Heine University Düsseldorf
No 7958, IZA Discussion Papers from Institute of Labor Economics (IZA)
Firms' labor demand responses to wage changes are of key interest in empirical research and policy analysis. However, despite extensive research, estimates of labor demand elasticities remain subject to considerable heterogeneity. In this paper, we conduct a comprehensive meta-regression analysis to re-assess the empirical literature on labor demand elasticities. Building on 942 elasticity estimates from 105 different studies, we identify sources of variation in the absolute value of this elasticity. Heterogeneity due to the theoretical and empirical specification of the labor demand model, different datasets used or sectors and countries considered explains more than 80% of the variation in the estimates. We further find substantial evidence for the presence of publication selection bias, as estimates of the own-wage elasticity of labor demand are upwardly inflated.
Keywords: labor demand; wage elasticity; meta-analysis (search for similar items in EconPapers)
JEL-codes: J23 C10 C83 (search for similar items in EconPapers)
Pages: 47 pages
New Economics Papers: this item is included in nep-lab, nep-lma and nep-ltv
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Journal Article: The own-wage elasticity of labor demand: A meta-regression analysis (2015)
Working Paper: The own-wage elasticity of labor demand: A meta-regression analysis (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp7958
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