Universität zu Köln

Bredemeier, Christian ORCID: 0000-0002-7358-6992, Gravert, Jan and Juessen, Falko (2019). Estimating Labor Supply Elasticities with Joint Borrowing Constraints of Couples. J. Labor Econ., 37 (4). S. 1215 - 1266. CHICAGO: UNIV CHICAGO PRESS. ISSN 1537-5307

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Abstract

Conventional estimates of Frisch labor supply elasticities are biased in the presence of borrowing constraints. We develop an incomplete-markets model with two-earner households and derive a new estimation approach for the Frisch elasticity that yields unbiased estimates even in samples that include borrowing-constrained households. Our approach exploits that the strength of the estimation bias depends on individuals' relative contribution to household earnings. It takes the form of a simple interaction term model with minimum data requirements. Using Panel Study of Income Dynamics data, we estimate Frisch elasticities of about 0.7 for men and rather homogeneous Frisch elasticities across the population.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Bredemeier, Christian UNSPECIFIED orcid.org/0000-0002-7358-6992 UNSPECIFIED Gravert, Jan UNSPECIFIED UNSPECIFIED UNSPECIFIED Juessen, Falko UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-133259
DOI:	10.1086/703148
Journal or Publication Title:	J. Labor Econ.
Volume:	37
Number:	4
Page Range:	S. 1215 - 1266
Date:	2019
Publisher:	UNIV CHICAGO PRESS
Place of Publication:	CHICAGO
ISSN:	1537-5307
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language INTERTEMPORAL SUBSTITUTION; CONSUMPTION INEQUALITY; INCOME TAXATION; MODEL; EARNINGS; TAXES; MICRO; RISK Multiple languages Economics; Industrial Relations & Labor Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/13325