From individual to aggregate labor supply: A quantitative analysis based on a heterogeneous agent macroeconomy

Yongsung Chang, Sun Bin Kim

Research output: Contribution to journalReview article

80 Citations (Scopus)

Abstract

At the aggregate level, the labor-supply elasticity depends on the reservation-wage distribution. We present a model economy where workforce heterogeneity stems from idiosyncratic productivity shocks. The model economy exhibits the cross-sectional earnings and wealth distributions that are comparable to those in the micro data. We find that the aggregate labor-supply elasticity of such an economy is around 1, greater than a typical micro estimate.

Original languageEnglish
Pages (from-to)1-27
Number of pages27
JournalInternational Economic Review
Volume47
Issue number1
DOIs
Publication statusPublished - 2006 Feb 1

Fingerprint

Labor supply
Macroeconomy
Heterogeneous agents
Quantitative analysis
Labor supply elasticity
Earnings distribution
Wage distribution
Workforce
Wealth distribution
Reservation wage
Productivity shocks
Micro data

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

Cite this

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From individual to aggregate labor supply : A quantitative analysis based on a heterogeneous agent macroeconomy. / Chang, Yongsung; Kim, Sun Bin.

In: International Economic Review, Vol. 47, No. 1, 01.02.2006, p. 1-27.

Research output: Contribution to journalReview article

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