Intensive and Extensive Margin Labor Supply Responses to Kinks in Disability Insurance Programs

The intertemporal substitution (Frisch) elasticity of labor supply governs the predictions of real business cycle models and models of taxation. We show that, for the extensive margin elasticity, two biases conspire to systematically produce large positive estimates when the elasticity is in fact zero. Among 723 estimates in 36 studies, the mean reported elasticity is 0.5. One half of that number is due to publication bias: larger estimates are reported preferentially. The other half is due to identification bias: studies with less exogenous time variation in wages report larger elasticities. Net of the biases, the literature implies a zero mean elasticity and, with 95% confidence, is inconsistent with calibrations above 0.25. To derive these results we collect 23 variables that reflect the context in which the elasticity was obtained, use nonlinear techniques to correct for publication bias, and employ Bayesian and frequentist model averaging to address model uncertainty.

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Can Women Have Children and a Career? IV Evidence from IVF Treatments

The American Economic Review ◽

10.1257/aer.20141467 ◽

2017 ◽

Vol 107 (6) ◽

pp. 1611-1637 ◽

Cited By ~ 31

Author(s):

Petter Lundborg ◽

Erik Plug ◽

Astrid Würtz Rasmussen

Keyword(s):

Labor Market ◽

In Vitro Fertilization ◽

Labor Supply ◽

Causal Effect ◽

Treatment Success ◽

Extensive Margin ◽

Vitro Fertilization ◽

Childless Women ◽

Fertility Variation

This paper introduces a new IV strategy based on IVF (in vitro fertilization) induced fertility variation among childless women to estimate the causal effect of having children on their career. For this purpose, we use administrative data on IVF treated women in Denmark. Because observed chances of IVF success do not depend on labor market histories, IVF treatment success provides a plausible instrument for childbearing. Our IV estimates indicate that fertility effects on earnings are: (i) negative, large, and long-lasting; (ii) driven by fertility effects on hourly earnings and not so much on labor supply; and (iii) much stronger at the extensive margin than at the intensive margin. (JEL D82, J13, J16, J22, J31, J32)

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Labor Supply and the Extensive Margin

The American Economic Review ◽

10.1257/aer.101.3.482 ◽

2011 ◽

Vol 101 (3) ◽

pp. 482-486 ◽

Cited By ~ 39

Author(s):

Richard Blundell ◽

Antoine Bozio ◽

Guy Laroque

Keyword(s):

Labor Supply ◽

Extensive Margin ◽

Extensive And Intensive Margins ◽

The Us ◽

Hours Of Work ◽

The Uk ◽

Over Time

In this paper we propose a systematic way of examining the importance of the extensive and the intensive margins of labor supply in order to explain the overall movements in total hours of work over time. We show how informative bounds can be developed on each of these margins. We apply this analysis to the evolution of hours of work in the US, the UK, and France and show that both the extensive and intensive margins matter in explaining changes in total hours.

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Spousal Labor Supply, Caregiving, and the Value of Disability Insurance

SSRN Electronic Journal ◽

10.2139/ssrn.3634277 ◽

2020 ◽

Author(s):

Siha Lee

Keyword(s):

Labor Supply ◽

Disability Insurance ◽

Spousal Labor

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Return-to-Work Policies and Labor Supply in Disability Insurance Programs

AEA Papers and Proceedings ◽

10.1257/pandp.20181047 ◽

2018 ◽

Vol 108 ◽

pp. 272-276

Author(s):

Arezou Zaresani

Keyword(s):

Return To Work ◽

Labor Supply ◽

Labor Force ◽

Administrative Data ◽

Policy Change ◽

Labor Force Participation ◽

Disability Insurance ◽

Sharp Discontinuity

Return-to-work policies in disability insurance (DI) programs allow beneficiaries to collect a portion of their benefits while working. I investigate whether a large increase in incentives to work in a return-to-work policy could induce benefit recipients to increase their labor supply. I quantify the effects on earnings and labor force participation using a sharp discontinuity in the induced incentives to work at the month of the policy change in a DI program in Canada. Using administrative data, I document that large incentives to work could induce beneficiaries to increase their labor supply both in intensive and extensive margins.

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