Full Citation

Title: Heterogeneity and Long-Run Changes in Aggregate Hours and the Labor Wedge

Citation Type: Journal Article

Publication Year: 2015

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Abstract: From 1961 to 2007, U.S. aggregate hours worked increased and the labor wedgemeasured as the discrepancy between a representative households marginal rate of substitution and the marginal product of labordeclined substantially. The labor wedge is negatively related to hours and is often attributed to labor income taxes. However, U.S. labor income taxes increased since 1961. We examine a model with gender and marital status heterogeneity which accounts for the trends in the U.S. hours and the labor wedge. Apart from taxes, the models labor wedge reflects non-distortionary cross-sectional differences in households hours worked and productivity. We provide evidence that household heterogeneity is important for long-run changes in labor wedges and hours in other OECD economies.

Url: http://www.sciencedirect.com/science/article/pii/S0165188914003133

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Authors: Cociuba, Simona E.; Ueberfeldt, Alexander

Periodical (Full): Journal of Economic Dynamics and Control

Issue:

Volume: 52

Pages: 75-95

Data Collections: IPUMS CPS

Topics: Gender, Labor Force and Occupational Structure, Other

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