Labor Supply Elasticities: Overcoming Nonclassical Measurement Error Using More Accurate Hours Data

We measure the impact of measurement error in labor-supply elasticities estimated over recalled usual work hours, as is ubiquitous in the literature. Employing hours of work in diaries collected by the American Time Use Survey, 2003-12, along with the same respondents' recalled usual hours, we show that the latter yield elasticities that are positively biased. We argue that this bias arises from the salience on recalled hours of differences in wage rates.

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Year of publication:	2016
Authors:	Barrett, Garry F. ; Hamermesh, Daniel S.
Publisher:	Bonn : Institute of Labor Economics (IZA)
Subject:	time use \| measurement error \| labor supply

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Series:	IZA Discussion Papers ; 10404
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	879256753 [GVK] hdl:10419/161027 [Handle] RePEc:iza:izadps:dp10404 [RePEc]
Classification:	J22 - Time Allocation and Labor Supply ; C21 - Cross-Sectional Models; Spatial Models
Source:	EconStor

Persistent link: https://www.econbiz.de/10011653132