Frisch elasticities in a model of indivisible labor supply with endogenous workweek length
Frisch elasticities in a model of indivisible labor supply with endogenous workweek length
In this paper, I provide an extension of the classical indivisible labor supply model where a large macro Frisch elasticity is reconciled with a small micro counterpart. Households take as given state-dependent hours per worker – shaped by a nonlinear mapping from hours worked to labor services and employment frictions – and make intertemporal labor supply decisions. In the standard indivisible labor supply model, aggregate fluctuations are independent of the individual preference parameter that governs the intensive-margin elasticity. In my model, however, they are connected through the extensive margin whose elasticity is empirically reasonable and is shaped by the individual preference parameter.
extensive margin, Frisch elasticity, Indivisible labor, intensive margin, labor supply
194-217
Yum, Minchul
23e96e8e-0dbd-4b6a-b3d1-538ab7d008b4
January 2024
Yum, Minchul
23e96e8e-0dbd-4b6a-b3d1-538ab7d008b4
Yum, Minchul
(2024)
Frisch elasticities in a model of indivisible labor supply with endogenous workweek length.
The Scandinavian Journal of Economics, 126 (1), .
(doi:10.1111/sjoe.12544).
Abstract
In this paper, I provide an extension of the classical indivisible labor supply model where a large macro Frisch elasticity is reconciled with a small micro counterpart. Households take as given state-dependent hours per worker – shaped by a nonlinear mapping from hours worked to labor services and employment frictions – and make intertemporal labor supply decisions. In the standard indivisible labor supply model, aggregate fluctuations are independent of the individual preference parameter that governs the intensive-margin elasticity. In my model, however, they are connected through the extensive margin whose elasticity is empirically reasonable and is shaped by the individual preference parameter.
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IndivisibleLaborStateDepHours_Revised
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Scandinavian J Economics - 2023 - Yum - Frisch elasticities in a model of indivisible labor supply with endogenous workweek
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Accepted/In Press date: 21 March 2023
e-pub ahead of print date: 21 August 2023
Published date: January 2024
Additional Information:
Funding Information:
This paper is based on a chapter in my PhD dissertation submitted to the Ohio State University. I thank Aubhik Khan and Julia Thomas for their guidance, and David Blau, Yongsung Chang, Paul Evans, Daeho Kim, Alex Ludwig, Lee Ohanian, Victor Ríos-Rull, and three referees, among others, for helpful comments.
Publisher Copyright:
© 2023 The Author. The Scandinavian Journal of Economics published by John Wiley & Sons Ltd on behalf of Föreningen för utgivande av the SJE.
Keywords:
extensive margin, Frisch elasticity, Indivisible labor, intensive margin, labor supply
Identifiers
Local EPrints ID: 476331
URI: http://eprints.soton.ac.uk/id/eprint/476331
ISSN: 1467-9442
PURE UUID: 1f5c9f32-0599-46c7-bf31-274ac9acd6c2
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Date deposited: 19 Apr 2023 16:44
Last modified: 17 Mar 2024 04:18
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Author:
Minchul Yum
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