This paper analyzes optimal linear taxes on labor income and savings in a twoperiod life-cycle model with ex ante identical households, endogenous leisure demands in both periods, and general processes of skill shocks over the life cycle. We demonstrate that the Atkinson-Stiglitz theorem breaks down under risk. Capital taxes are employed besides labor income taxes for two distinct reasons: i) c...

We build a heterogeneous life-cycle model which captures a large number of salient features of individual labor supply, by education, over the life cycle. The model provides an aggregation theory of individual labor supply, firmly grounded on micro evidence, and is used to study the aggregate labor supply responses to changes in the economic environment. We find that the aggregate labor supply ...

and particularly to Stanley Masters for many helpful criticisms and suggestions. At least one-half of the good ideas in the text should probably be attributed to Masters. I have discussed the study so often and in such great detail with him that it is impossible at this point for me to distinguish clearly which particular suggestions originated with him. Finally, I am indebted to Gordon Wilson ...

a r t i c l e i n f o Since September 2000, as a result of mobility restrictions, the supply of Palestinian workers competing for local jobs in the West Bank has increased by about fifty percent. This paper takes advantage of this unique natural experiment to study the effects of labor supply shocks on labor market outcomes. Using quarterly information on wages and employment in each city in th...

The aging of the U.S. population, combined with an increasing probability that any given older individual will work, means that the importance of older workers to the labor force is rising. One possible solution to the solvency problems facing the Social Security System is increasing the labor supply of older workers. Understanding how policy levers can affect the labor supply of the elderly th...

The authors use a laboratory experiment to examine the impact of relative wages on labor supply. They test the hypothesis that, ceteris paribus, making a given wage high (low) relative to other wage levels will lead to an increase (decrease) in labor supply. They find that labor supply does respond significantly to relative pay, and in the expected direction. However, when a strong enough reaso...

This paper develops a new method of estimating risk aversion using data on labor supply behavior. In particular, I show that existing evidence on labor supply behavior places a tight upper bound on risk aversion in the expected utility model. I derive a formula for the coe¢ cient of relative risk aversion ( ) in terms of (1) the ratio of the income elasticity of labor supply to the wage elastic...

1. Simple labor supply models with correction for non-participation (PS #3) 2. Other approaches to kinked budget sets discretization 3. Dynamic labor supply introduction and overview Readings Thomas A. Mroz. “The Sensitivity of an Empirical Model of Married Women’s Hours of Work to Economic and Statistical Assumptions.” Econometrica, 55 (4) (July, 1987), pp. 765-799. Arthur van Soest "Structura...