TY  - JOUR
AU  - Boskin,Michael J.
AU  - Lau,Lawrence J.
TI  - Taxation and Aggregate Factor Supply: Preliminary Estimates
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 221
PY  - 1977
Y2  - December 1977
UR  - http://www.nber.org/papers/w0221
L1  - http://www.nber.org/papers/w0221.pdf
N1  - Author contact info:
Michael J. Boskin
Hoover Institution
Stanford University
434 Galvez Mall
Stanford, CA 94305-6010
Tel: 650/723-6482
Fax: 650/723-6494
E-Mail: boskin@stanford.edu

Lawrence Lau
CIC International (Hong Kong) Co., Limited
CITIC Tower
1 Tim Mei  Avenue, Central
Hong Kong
Fax: 852-3710-6968
E-Mail: Lawrence@lawrencejlau.hk
AB  - This paper extends the analysis of aggregate factor supply to a model which accounts simultaneously for the consumption/saving and labor/leisure choices. A translog utility maximization model is used to derive the set of consumption and leisure demand equations; these in turn are estimated on U.S. aggregate time series data. The empirical results are striking: we estimate (quite precisely) substantial own and cross price elasticities for current and future consumption and labor supply. The implied interest elasticity of saving is approximately 0.4.The results suggest that previous studies of labor supply and/or consumption which have ignored cross-price effects are mis-specified. We also strongly reject the hypothesis that implicit social security had no effect on factor supply.
ER  -