Using Labor Supply Elasticities to Learn about Income Inequality : The Role of Productivities versus Preferences

Bergstrom, Katy ; Dodds, William

World Bank, Washington, DC

关键词: LABOR PRODUCTIVITY;    LABOR SUPPLY;    ELASTICITY;    INCOME INEQUALITY;    PREFERENCE;   

DOI  :  10.1596/1813-9450-9102
RP-ID  :  WPS9102

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper argues that labor supplyelasticities encode information about the determinants ofincome inequality. In the theoretical framework, individualschoose labor supply conditional on productivities andpreferences for consumption relative to leisure. The papershows that reduced-form labor supply elasticities allow oneto isolate the components of income due to productivitiesversus preferences. The paper then investigates what laborsupply elasticities imply about the importance ofproductivities versus preferences in the United States.Estimates from the literature imply productivities drivemost of income inequality. Larger income effects and largerdifferences between income and hours worked elasticitiesimply preferences play an increasingly important role.