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Why Macro Labor Supply Is More Elastic Than Micro: Theory And Policy Implications, Riccardo Fiorito
Why Macro Labor Supply Is More Elastic Than Micro: Theory And Policy Implications, Riccardo Fiorito
riccardo fiorito
Micro and Macro estimates of labor supply don't have to be the same since they refer to different variables. This is shown using the same PSID data for the micro and the macro estimate. The macro elasticity is widely bigger than the micro elasticity as it is assumed by Prescott (1986) when calibrating the RBC model.