Publication and Identification Biases in Measuring the Intertemporal Substitution of Labor Supply
Tomas Havranek,
Roman Horvath and
Ali Elminejad
No nshqx, MetaArXiv from Center for Open Science
Abstract:
The intertemporal substitution (Frisch) elasticity of labor supply governs the predictions of real business cycle models and models of taxation. We show that, for the extensive margin elasticity, two biases conspire to systematically produce large positive estimates when the elasticity is in fact zero. Among 723 estimates in 36 studies, the mean reported elasticity is 0.5. One half of that number is due to publication bias: larger estimates are reported preferentially. The other half is due to identification bias: studies with less exogenous time variation in wages report larger elasticities. Net of the biases, the literature implies a zero mean elasticity and, with 95% confidence, is inconsistent with calibrations above 0.25. To derive these results we collect 23 variables that reflect the context in which the elasticity was obtained, use nonlinear techniques to correct for publication bias, and employ Bayesian and frequentist model averaging to address model uncertainty.
Date: 2021-05-23
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)
Downloads: (external link)
https://osf.io/download/60ab659c0b6c6902019b8ba4/
Related works:
Working Paper: Publication and Identification Biases in Measuring the Intertemporal Substitution of Labor Supply (2021) 
Working Paper: Publication and Identification Biases in Measuring the Intertemporal Substitution of Labor Supply (2021) 
Working Paper: Publication and Identification Biases in Measuring the Intertemporal Substitution of Labor Supply (2021) 
Working Paper: Publication and Identification Biases in Measuring the Intertemporal Substitution of Labor Supply (2020) 
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:osf:metaar:nshqx
DOI: 10.31219/osf.io/nshqx
Access Statistics for this paper
More papers in MetaArXiv from Center for Open Science
Bibliographic data for series maintained by OSF ().