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Taxes, benefits and labour force participation: A survey of the quasi-experimental literature

PublicationArticle (with peer review)
Arbetsmarknad, entitlements, favoritism, fiscal crises, inequality, Jacob Lundberg, John Norell, public debt, Skatter, state capacity

Abstract

Abstract
We review the literature that uses quasi-experimental methods to estimate the elasticity of labour force participation with respect to the financial gain from work. We find a wide range of elasticities, with an average of 0.36. 27 out of 35 papers find elasticities larger than 0.1, providing strong evidence that individuals respond to incentives on the extensive margin labour supply. Elasticities are larger for women, and have declined over time.

Lundberg, J. & Norell, J. (2020). Taxes, benefits and labour force participation: A survey of the quasi-experimental literature. Journal of the Finnish Economic Association, 1(1), 60-77.

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Working Paper. No 313: Taxes, benefits and labour force participation: A survey of the quasi-experimental literature
Working paperPublication
Lundberg, J. & Norell, J.
Publication year

2018

Published in

Ratio Working Paper

Abstract

We review the literature that uses quasi-experimental methods to estimate the elasticity of labour force participation with respect to the financial gain from work. We find a wide range of elasticities, with an average of 0.38. 26 out of 31 papers find elasticities larger than 0.1, providing strong evidence that individuals respond to incentives on the extensive margin of labour supply. Elasticities are larger for women, and have declined over time.

*Revised 26 February 2020

Working Paper. No 313: Taxes, benefits and labour force participation: A survey of the quasi-experimental literature
Working paperPublication
Lundberg, J. & Norell, J.
Publication year

2018

Published in

Ratio Working Paper

Abstract

We review the literature that uses quasi-experimental methods to estimate the elasticity of labour force participation with respect to the financial gain from work. We find a wide range of elasticities, with an average of 0.38. 26 out of 31 papers find elasticities larger than 0.1, providing strong evidence that individuals respond to incentives on the extensive margin of labour supply. Elasticities are larger for women, and have declined over time.

*Revised 26 February 2020

Taxes, benefits and labour force participation: A survey of the quasi-experimental literature
Artikel (med peer review)Publication
Lundberg, J. & Norell, J.
Publication year

2020

Abstract

Abstract
We review the literature that uses quasi-experimental methods to estimate the elasticity of labour force participation with respect to the financial gain from work. We find a wide range of elasticities, with an average of 0.36. 27 out of 35 papers find elasticities larger than 0.1, providing strong evidence that individuals respond to incentives on the extensive margin labour supply. Elasticities are larger for women, and have declined over time.

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