Labor supply
Subtitle: are the income and substitution effects both large or both small?
By: Miles S. Kimball, Matthew D. Shapiro.
Contributors: Shapiro, Matthew D.; National Bureau of Economic Research.
Series: NBER working paper series -- working paper 14208; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 14208.
Publisher: National Bureau of Economic Research
Published: 2008
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "Labor supply is unresponsive to permanent changes in wage rates.  Thus, income and substitution effects cancel, but are they both close to zero or both large? This paper develops a theory of labor supply where income and substitution effects cancel, taking into account optimization over time, fixed costs of going to work, and interactions of labor supply decisions within the household.  The paper then applies this theory to survey evidence on the response of labor supply to a large wealth shock.  The evidence implies that the constant marginal utility of wealth (Frisch) elasticity of labor supply is about one"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 8/8/2008.

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