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Social and Behavioral Sciences Commons™
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Full-Text Articles in Social and Behavioral Sciences
Social Interactions In The Labor Market, Andrew Grodner, Thomas J. Kniesner, John A. Bishop
Social Interactions In The Labor Market, Andrew Grodner, Thomas J. Kniesner, John A. Bishop
Center for Policy Research
We examine theoretically and empirically social interactions in labor markets and how policy prescriptions can change dramatically when there are social interactions present.
Spillover effects increase labor supply and conformity effects make labor supply perfectly inelastic at a reference group average. The demand for a good may also be influenced by either a spillover effect or a conformity effect. Positive spillover increases the demand for the good with interactions, and a conformity effect makes the demand curve pivot to become less price sensitive. Similar social interactions effects appear in the associated derived demands for labor.
Individual and community factors may …
Labor Supply With Social Interactions: Econometric Estimates And Their Tax Policy Implications, Andrew Grodner, Thomas Kniesner
Labor Supply With Social Interactions: Econometric Estimates And Their Tax Policy Implications, Andrew Grodner, Thomas Kniesner
Center for Policy Research
Our research fleshes out econometric details of examining possible social interactions in labor supply. We look for a response of a person's hours worked to hours worked in the labor market reference group, which includes those with similar age, family structure, and location. We identify endogenous spillovers by instrumenting average hours worked in the reference group with hours worked in neighboring reference groups. Estimates of the canonical labor supply model indicate positive economically important spillovers for adult men. The estimated total wage elasticity of labor supply is 0.22, where 0.08 is the exogenous wage change effect and 0.14 is the …
Taxes, Deadweight Loss And Intertemporal Female Labor Supply: Evidence From Panel Data, Anil Kumar
Taxes, Deadweight Loss And Intertemporal Female Labor Supply: Evidence From Panel Data, Anil Kumar
Center for Policy Research
Very few existing studies have estimated female labor supply elasticities using a U.S. panel data set, although cross-sectional studies abound. Also, most existing studies have done so in a static framework. I make an attempt to fill the gap in this literature by estimating a lifecycle-consistent specification with taxes, in a limited dependent variable framework, on a panel of married females from the PSID. Both parametric random effects and semi parametric fixed effects methods are applied. I find evidence of larger substitution effects than found in female labor supply literature with taxes, suggesting considerable distortionary effects from income taxation. The …