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Aggregating Elasticities: Intensive and Extensive Margins of Women's Labor Supply

Aggregating elasticities: intensive and extensive margins of Women's labor supply
Authors: Attanasio, OP; Levell, P; Low, H; Sanchez-Marcos, V;

Aggregating Elasticities: Intensive and Extensive Margins of Women's Labor Supply

Abstract

We show that there is substantial heterogeneity in women's labour supply elasticities at the micro level and highlight the implications for aggregate behaviour. We consider both intertemporal and intratemporal choices, and identify intensive and extensive responses in a consistent life-cycle framework, using US CEX data. Heterogeneity is due to observables, such as age, wealth, hours worked and the wage level as well as to unobservable tastes for leisure: the median Marshallian elasticity for hours worked is 0.18, with corresponding Hicksian elasticity of 0.54 and Frisch elasticity of 0.87. At the 90th percentile, these values are 0.79, 1.16, and 1.92. Responses at the extensive margin explain about 54% of the total labour supply response for women under 30, although this declines with age. Aggregate elasticities are higher in recessions, and increase with the length of the recession. The heterogeneity at the micro level means that the aggregate labour supply elasticity is not a structural parameter: any aggregate elasticity will depend on the demographic structure of the economy as well as the distribution of wealth and the particular point in the business cycle.

Country
United Kingdom
Keywords

Labor market, contracts, labour supply elasticities, 38 Economics, aggregation, non-separability, 8 Decent Work and Economic Growth, 3801 Applied Economics, Women's Health, heterogeneity, labor supply elasticities

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
36
Top 10%
Top 10%
Top 10%
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bronze