Article

De Economist

, Volume 156, Issue 1, pp 25-43

Open Access This content is freely available online to anyone, anywhere at any time.

The Wage Elasticity of Labour Supply: A Synthesis of Empirical Estimates

  • Michiel EversAffiliated withMinistry of Economic Affairs
  • , Ruud De MooijAffiliated withCPB Netherlands Bureau for Economic Policy AnalysisErasmus Universiteit RotterdamTinbergen InstituteNetsparCESifo
  • , Daniel Van VuurenAffiliated withCPB Netherlands Bureau for Economic Policy AnalysisNetspar Email author 

Summary

This paper performs a meta-analysis of empirical estimates of uncompensated labour supply elasticities. For the Netherlands, we find that an elasticity of 0.5 for women and 0.1 for men is a good reflection of what the literature reveals. The elasticity for men hardly differs between countries, but for women some cross-country variation is found. The increasing participation rate of women may lead to a somewhat lower elasticity in the future. Both the specification of the hours function and the estimation method are found to affect elasticity estimates.

Keywords

labour supply uncompensated wage elasticity meta-analysis

JEL Code(s)

J22 H3