This paper shows that existing estimates of labor supply elasticities place a tight upper bound on risk aversion in an expected utility model. I derive a formula that relates the coefficient of relative risk aversion (γ) to the ratio of the income elasticity of labor supply to the wage elasticity, holding fixed the degree of complementarity between consumption and leisure. The degree of complem...

We study the wage structure during economic transition in the context of Chinese cities and examine the effect of China’s urban housing reforms on the urban wage structure (1988-2005). We find that these reforms, which untied access to housing from state-sector employment, shifted approximately 17% of the labor force from the state sector to the private sector, increasing the private sector lab...

The positive correlation between hourly wages and height, which results in higher labor supply of tall individuals, is well-documented in the literature. Accepting the utilitarian perspective and assuming that height does not aff ect utility implies that linking income taxes to height is welfare improving. This paper argues that height might not only aff ect an individual’s income but also util...

This paper investigates the impact of various economic measures on child labor in an open dual economy. We construct a small open economy model with heterogeneity of households in terms of location of residency and income. A part of households with low income supplies child labor when they reside in the rural area. The measures we will mainly consider are trade policies (e.g. import tariff and ...

We thank reviewers from the Committee on Population at the National Academy of Sciences for useful comments. We also thank Vijaya Ramachandran for excellent research assistance and for especially helpful discussions and suggestions. The research reported here is part of the NBER's research program in Labor Studies. Any opinions expressed are those of the authors and not those of the National Bu...

In a “New Trade”model with endogenous supply of skill, how knowledge difussion through international trade a¤ects growth and skill premium depends on responsiveness of skill supply to technological change. The less responsive is skill supply, the more likely that lower skill-premium accompanies higher growth after opening to trade. 1 Introduction This project deals with the question of what e¤e...

Taking into account that within the government sector all tax payments cancel out, a public enterprise in an economy with distortionary wage taxation will be more labor intensive than a private firm. However, an unequal tax treatment of public and private sectors distorts away the economy from production efficiency. In a general equilibrium model, incurring this inefficiency is worthwhile from ...