Labor Supply Elasticities: Overcoming Nonclassical Measurement Error Using More Accurate Hours Data
NBER Working Paper No. 22920
Issued in December 2016
NBER Program(s):The Labor Studies Program
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.
Acknowledgments and Disclosures
Machine-readable bibliographic record -
Document Object Identifier (DOI): 10.3386/w22920
- forthcoming, Journal of Human Resources 54(1): Jan. 2019, pp. 255-265.
- Garry F. Barrett & Daniel S. Hamermesh, 2019. "Labor Supply Elasticities," Journal of Human Resources, vol 54(1), pages 255-265. citation courtesy of
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