On the measurement of the elasticity of labour

Item Type Journal paper
Abstract We use a simple theoretical framework, a building block of many macroeconomic models, to study the prominently debated relationship between the model parametrisation of the Frisch elasticity and the reduced-form evidence on the elasticity of labour. Focusing on tax holidays, we show that the elasticity measured with a reduced-form approach is only equal to the Frisch-elasticity parameter if there are no income or general equilibrium effects. Furthermore, for a wide range of standard values of the Frisch-elasticity parameter, the response of labour generated by a tax holiday in the model is aligned with the reduced-form evidence.
Authors Gottlieb, Charles; Onken, Jörn & Valladares-Esteban, Arnau
Journal or Publication Title European Economic Review
Language English
Keywords Frisch Elasticity, Labour Supply, Aggregate Hours, Tax Holidays.
Subjects economics
social sciences
HSG Classification contribution to scientific community
HSG Profile Area SEPS - Economic Policy
Refereed Yes
Date October 2021
Publisher Elsevier
Volume 139
ISSN 0014-2921
Publisher DOI https://doi.org/10.1016/j.euroecorev.2021.103879
Official URL https://www.sciencedirect.com/science/article/pii/...
Depositing User Prof. Ph.D Charles Gottlieb
Date Deposited 12 Sep 2021 11:52
Last Modified 01 Apr 2023 00:25
URI: https://www.alexandria.unisg.ch/publications/264294


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Gottlieb, Charles; Onken, Jörn & Valladares-Esteban, Arnau (2021) On the measurement of the elasticity of labour. European Economic Review, 139 ISSN 0014-2921


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