Battisti, M. , Michaels, R. and Park, C. (2024) Labor supply within the firm. Journal of Labor Economics, 42(2), pp. 511-548. (doi: 10.1086/723519)
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Abstract
There is substantial variation in working time even within employer-employee matches, yet estimates of the Frisch elasticity of labor supply can be near zero. This paper proposes a tractable theory of earnings and working time to interpret these observations. Production complementarities attenuate the response of working time to idiosyncratic, or worker-specific, shocks, but firm-wide shocks are mediated by preference parameters. The model can be identified using firm-worker matched data, revealing a Frisch elasticity of around 0.5. A quasi-experimental approach that exploits only idiosyncratic variation would find an elasticity less than half this.
Item Type: | Articles |
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Additional Information: | Battisti gratefully acknowledges Önancial support by the Leibniz Association (SAW-2012-ifo-3). Michaels gratefully acknowledges Önancial support from the UK Economic and Social Research Council (ESRC), Award reference ES/L009633/1. |
Status: | Published |
Refereed: | Yes |
Glasgow Author(s) Enlighten ID: | Battisti, Professor Michele |
Authors: | Battisti, M., Michaels, R., and Park, C. |
College/School: | College of Social Sciences > Adam Smith Business School > Economics |
Journal Name: | Journal of Labor Economics |
Publisher: | University of Chicago Press |
ISSN: | 0734-306X |
ISSN (Online): | 1537-5307 |
Copyright Holders: | Copyright © 2024 The University of Chicago |
First Published: | First published in Journal of Labor Economics 42(2):511-548 |
Publisher Policy: | Reproduced in accordance with the copyright policy of the publisher |
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