scholarly journals Kwacha Gonna Do? Experimental Evidence about Labor Supply in Rural Malawi

2016 ◽  
Vol 8 (1) ◽  
pp. 129-149 ◽  
Author(s):  
Jessica Goldberg
Keyword(s):  
Labor Market ◽  
Field Experiment ◽  
Labor Supply ◽  
Experimental Evidence ◽  
Wage Distribution ◽  
Wage Elasticity ◽  
Supply Elasticity ◽  
Labor Supply Elasticity ◽  
Job Offers ◽  
Daily Wage

I use a field experiment to estimate the wage elasticity of employment in the day labor market in rural Malawi. Once a week for 12 consecutive weeks, I make job offers for a workfare-type program to 529 adults. The daily wage varies from the tenth to the ninetieth percentile of the wage distribution, and individuals are entitled to work a maximum of one day per week. In this context (the low agricultural season), 74 percent of individuals worked at the lowest wage, and consequently the estimated labor supply elasticity is low (0.15), regardless of observable characteristics. (JEL C93, J22, J31, O15, O18, R23)

Measuring Labor Market Power Two Ways

2019 ◽  
Vol 109 ◽  
pp. 317-321 ◽  
Author(s):  
José Azar ◽  
Ioana Marinescu ◽  
Marshall Steinbaum
Keyword(s):  
Labor Market ◽  
Labor Supply ◽  
Labor Markets ◽  
Market Power ◽  
Negative Relationship ◽  
Firm Level ◽  
Supply Elasticity ◽  
Labor Supply Elasticity ◽  
Monopsony Power

We compute the “applications elasticity” as a proxy for firm-level labor supply elasticity by regressing the applications to a given job on the posted wage. The average applications elasticity in our data is 0.42. We then relate our elasticity estimates to concentration in labor markets defined by six-digit SOC occupations and commuting zone. We show a robust negative relationship between the two. Applications elasticity is near zero for all but the most densely populated labor markets, suggesting that 80 percent of the workforce works in labor markets where employers exercise significant monopsony power.

scholarly journals A Labor Supply Elasticity Accord?

2011 ◽  
Vol 101 (3) ◽  
pp. 487-491 ◽  
Author(s):  
Lars Ljungqvist ◽  
Thomas J Sargent
Keyword(s):  
Life Cycle ◽  
Business Cycle ◽  
Labor Supply ◽  
Real Business Cycle ◽  
Government Institutions ◽  
Supply Elasticity ◽  
Career Length ◽  
Labor Supply Elasticity ◽  
Interior Solutions

A dispute about the size of the aggregate labor supply elasticity has been fortified by a contentious aggregation theory used by real business cycle theorists. The replacement of that aggregation theory with one more congenial to microeconomic observations opens possibilities for an accord about the aggregate labor supply elasticity. The new aggregation theory drops features to which empirical microeconomists objected and replaces them with life-cycle choices. Whether the new aggregation theory ultimately indicates a small or large macro labor supply elasticity will depend on how shocks and government institutions interact to put workers at interior solutions for career length.

scholarly journals A New Method of Estimating Risk Aversion

2006 ◽  
Vol 96 (5) ◽  
pp. 1821-1834 ◽  
Author(s):  
Raj Chetty
Keyword(s):  
Risk Aversion ◽  
Labor Supply ◽  
Income Elasticity ◽  
Utility Model ◽  
Wage Elasticity ◽  
Consumption Choices ◽  
Labor Supply Elasticity ◽  
Using Data ◽  
Wage Increases ◽  
Expected Utility Model

I show existing evidence on labor supply behavior places an upper bound on risk aversion in the expected utility model. I derive a formula for the coefficient of relative risk aversion (γ) in terms of the ratio of the income elasticity of labor supply to wage elasticity and degree of complementarity between consumption and labor. I bound the degree of complementarity using data on consumption choices when labor supply varies across states. Using labor supply elasticity estimates, I find a mean estimate of [Formula: see text], then show generating γ > 2 requires that wage increases cause sharper labor supply reductions.

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