Real wages and labor supply in a quasi life-cycle framework : A macro compression by Swedish National Transfer Accounts (1985-2003)
(2016) In Vienna Yearbook of Population Research 1. p.83-114- Abstract
This paper examines the life-cycle dynamics of real wages and labor supply in Sweden. The descriptive results lend support to the inter-temporal substitution hypothesis (ISH), as the age patterns of real wages and the labor supply are both hump-shaped. However, the age-wage profiles increasingly shift toward older ages over time, whereas the age-employment profiles do not. This leads to an accentuated difference-in-differences of the two variables from prime working age through retirement, which casts doubt on the explanatory power of the ISH for the lifecycle labor supply. Econometric analysis shows that the intra-temporal elasticity outweighs the inter-temporal elasticity of substitution, and thus provides little support for the ISH.... (More)
This paper examines the life-cycle dynamics of real wages and labor supply in Sweden. The descriptive results lend support to the inter-temporal substitution hypothesis (ISH), as the age patterns of real wages and the labor supply are both hump-shaped. However, the age-wage profiles increasingly shift toward older ages over time, whereas the age-employment profiles do not. This leads to an accentuated difference-in-differences of the two variables from prime working age through retirement, which casts doubt on the explanatory power of the ISH for the lifecycle labor supply. Econometric analysis shows that the intra-temporal elasticity outweighs the inter-temporal elasticity of substitution, and thus provides little support for the ISH. The estimated labor supply elasticity also varies considerably across age groups. This suggests that an array of age-specific parameters are needed in calibrating the overlapping generation model (OLG).
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- author
- Qi, Haodong LU
- organization
- publishing date
- 2016-01-01
- type
- Contribution to journal
- publication status
- published
- subject
- in
- Vienna Yearbook of Population Research
- volume
- 1
- pages
- 32 pages
- publisher
- Verlag der Österreichischen Akademie der Wissenschaften
- external identifiers
-
- scopus:85046653708
- ISSN
- 1728-4414
- DOI
- 10.1553/POPULATIONYEARBOOK2014S83
- language
- English
- LU publication?
- yes
- id
- 7b42b6e6-a624-497b-916e-b2d06155c8de
- date added to LUP
- 2018-05-28 13:50:37
- date last changed
- 2022-01-31 03:44:33
@article{7b42b6e6-a624-497b-916e-b2d06155c8de,
abstract = {{<p>This paper examines the life-cycle dynamics of real wages and labor supply in Sweden. The descriptive results lend support to the inter-temporal substitution hypothesis (ISH), as the age patterns of real wages and the labor supply are both hump-shaped. However, the age-wage profiles increasingly shift toward older ages over time, whereas the age-employment profiles do not. This leads to an accentuated difference-in-differences of the two variables from prime working age through retirement, which casts doubt on the explanatory power of the ISH for the lifecycle labor supply. Econometric analysis shows that the intra-temporal elasticity outweighs the inter-temporal elasticity of substitution, and thus provides little support for the ISH. The estimated labor supply elasticity also varies considerably across age groups. This suggests that an array of age-specific parameters are needed in calibrating the overlapping generation model (OLG).</p>}},
author = {{Qi, Haodong}},
issn = {{1728-4414}},
language = {{eng}},
month = {{01}},
pages = {{83--114}},
publisher = {{Verlag der Österreichischen Akademie der Wissenschaften}},
series = {{Vienna Yearbook of Population Research}},
title = {{Real wages and labor supply in a quasi life-cycle framework : A macro compression by Swedish National Transfer Accounts (1985-2003)}},
url = {{http://dx.doi.org/10.1553/POPULATIONYEARBOOK2014S83}},
doi = {{10.1553/POPULATIONYEARBOOK2014S83}},
volume = {{1}},
year = {{2016}},
}