TY  - JOUR
AU  - Rogerson,Richard
AU  - Wallenius,Johanna
TI  - Micro and Macro Elasticities in a Life Cycle Model With Taxes
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13017
PY  - 2007
Y2  - April 2007
UR  - http://www.nber.org/papers/w13017
L1  - http://www.nber.org/papers/w13017.pdf
N1  - Author contact info:
Richard Rogerson
Department of Economics
College of Business
Arizona State University
Tempe, AZ  85287
Tel: 480/727-6671
Fax: 215/573-4217
E-Mail: richard.rogerson@asu.edu

Johanna Wallenius
Dept. of Economics
Arizona State University
Tempe, AZ 85287
E-Mail: johanna.wallenius@asu.edu
AB  - We build a life cycle model of labor supply that incorporates changes along both the intensive and extensive margin and use it to assess the consequences of changes in tax and transfer policies on equilibrium hours of work. We find that changes in taxes have large aggregate effects on hours of work. Moreover, we find that there is no inconsistency between this result and the empirical finding of small labor elasticities for prime age workers. In our model, micro and macro elasticities are effectively unrelated. Our model is also consistent with other cross-country patterns.
ER  -