Labor supply within the firm

Michele Battisti (), Ryan Michaels and Choonsung Park

No 222, ifo Working Paper Series from ifo Institute - Leibniz Institute for Economic Research at the University of Munich

Abstract: Estimates of labor supply elasticities can be sensitive to the source of identifying variation. This paper’s model of production complementarities helps to interpret conflicting evidence. Complementarities attenuate working time adjustments to idiosyncratic, or individual-specific, variation in work incentives. Complementarities do not restrict, however, responses to firm-wide shocks; the latter is mediated by preference parameters. Estimating the model using matched firm-worker data, the paper disentangles production from preference parameters. The Frisch elasticity along the intensive margin is found to be around 0.5. A quasi-experimental approach, using idiosyncratic variation in work incentives, would find an elasticity less than half this.

JEL-codes: J22 J23 J31 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Labor Supply Within the Firm (2020)
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