Aggregation and Labor Supply Elasticities | Zendy

Aloïs Kneip | Zendy; Monika Merz | Zendy; Lidia Storjohann | Zendy

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Aggregation and Labor Supply Elasticities

Author(s) -

Aloïs Kneip,

Monika Merz,

Lidia Storjohann

Publication year - 2019

Publication title -

journal of the european economic association

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 7.792

H-Index - 93

eISSN - 1542-4774

pISSN - 1542-4766

DOI - 10.1093/jeea/jvz039

Subject(s) - economics , margin (machine learning) , wage , reservation , elasticity (physics) , reservation wage , econometrics , aggregate (composite) , labour economics , price elasticity of supply , price elasticity of demand , microeconomics , computer science , materials science , machine learning , composite material , computer network

This paper develops a statistical aggregation procedure for the Frisch elasticity of labor supply. It allows for worker heterogeneity and is applicable to an individual labor supply function with non-employment as a possible outcome. Subjecting all offered or paid wages to an unanticipated temporary change we analytically derive the aggregate elasticity and its main components. We quantify each component using individual-specific data from the German SOEP for males at working-age. We measure the hours' adjustment along the intensive and the extensive margin with the help of observed wages and reservation wages, respectively. The estimated aggegate Frisch elasticity varies over time.

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