Arbeitspapier
The Intertemporal-Substitution Hypothesis is Alive and Well (But Hiding in the Data)
According to the intertemporal-substitution hypothesis, which underlies the typical empirical real business cycle model, cyclical fluctuations in employment and hours of work are optimizing labor-supply responses to short-run aggregate demand shifts. We demonstrate that previous empirical labor-supply research has used inappropriate data to test the intertemporal-substitution hypothesis. We estimate a fixed-effects life-cycle labor-supply model with more informative data, the triannual micro data of the Survey of Income and Program Participation. We find economy-wide wage elasticities of employment and hours worked per employee of +1.55 and +0.51, which support the intertemporal-substitution hypothesis and give econometric credibility to the labor-market specification of empirical real business cycle models.
- Sprache
-
Englisch
- Erschienen in
-
Series: Upjohn Institute Working Paper ; No. 93-19
- Klassifikation
-
Wirtschaft
- Thema
-
intertemporal-substitution
cycle
Kneisner
Kimmel
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Kimmel, Jean
- Ereignis
-
Veröffentlichung
- (wer)
-
W.E. Upjohn Institute for Employment Research
- (wo)
-
Kalamazoo, MI
- (wann)
-
1993
- DOI
-
doi:10.17848/wp93-19
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Kimmel, Jean
- W.E. Upjohn Institute for Employment Research
Entstanden
- 1993
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