@techreport{10902/14881,
year = {2018},
url = {http://hdl.handle.net/10902/14881},
abstract = {ABSTRACT: We estimate labour supply elasticities at the micro level and show what we can learn from possibly very heterogeneous elasticities for aggregate behaviour. We consider both intertemporal and intratemporal choices, and identify intensive and extensive responses in a consistent lifecycle framework, using US CEX data. There is substantial heterogeneity in how individuals respond to wage changes at all margins, both due to observables, such as age, wealth, hours worked and the wage level as well as to unobservable tastes for leisure. We estimate the distribution of Marshallian elasticities for hours worked to have a median value of 0.18, and corresponding Hicksian elasticities of 0.54 and Frisch elasticities of 0.87. At the 90th percentile, these values are 0.79, 1.16, and 1.92. Responses at the extensive margin are important, explaining about 54% of the total labour supply response for women under 30, although this importance declines with age. We show that aggregate elasticities are cyclical, being larger in recessions and particularly so in long recessions. This 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.},
organization = {We  are  grateful  for  a  number  of  useful  conversations  with  Joe  Altonji,  Richard  Blundell,  Guy Laroque,Costas  Meghir,  Richard  Rogerson  and  Tom  Sargent.  We  received  several  useful comments  from  differentseminar  audiences  and  during  presentation  at  the  NBER  Summer Institute  and  the  Society  for  EconomicDynamic  Conference.  Attanasio's  research  was  partially funded  by  an  ESRC  Professorial  Fellowshipand  by  the  ESRC  Centre  for  the  Microeconomic Analysis  of  Public  Policy  at  the  Institute  for  FiscalStudies.  Sánchez-Marcos  thanks  Spanish MCYT for Grant ECO2009-09614.  The views expressedherein are those of the authors and do not necessarily reflect the views of the National Bureau of EconomicResearch.},
publisher = {National Bureau of Economic Research},
publisher = {NBER Working Paper No. 21315},
title = {Aggregating Elasticities: Intensive and Extensive Margins of Female Labour Supply},
author = {Attanasio, Orazio and Levell, Peter and Low, Hamish and Sánchez Marcos, Virginia},
}