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Arnau Valladares-Esteban
Last Name
Valladares-Esteban
First name
Arnau
Email
arnau.valladares-esteban@unisg.ch
Phone
+41 71 224 26 93
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PublicationOn the measurement of the elasticity of labourWe 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.Type: journal articleJournal: European Economic ReviewVolume: 139