The Effect of Income and Wage Rates on the Labor Supply of Young Men and Women. Discussion Paper No. 226-74 [electronic resource] / Irwin Garfinkel and Stanley Masters.
While static economic theory predicts that most income transfer programs will lead to reductions in the labor supply of program beneficiaries, the theory has nothing to say about the magnitude of such reductions. In order to predict the magnitude of such reductions, the labor supply schedule of pote...
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| Format: | Electronic eBook |
| Language: | English |
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1974.
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| Summary: | While static economic theory predicts that most income transfer programs will lead to reductions in the labor supply of program beneficiaries, the theory has nothing to say about the magnitude of such reductions. In order to predict the magnitude of such reductions, the labor supply schedule of potential beneficiaries must be known. In previous papers we presented estimates of the effects of income and wage rates on the labor supply of prime age males and females. In this paper we present and discuss similar results for men and women aged 20 to 24. Probably the most interesting aspect of the labor supply decision of young people is its interconnection with the decision of how much time to spend in school. The importance of the role of education is reflected here. In the first section of the paper we present our basic models, describe the data that we shall use for testing the models and discuss our a priori expectations with regard to the magnitude of (and biases in) the various elasticity estimates. In the second section we present income elasticity estimates for married men, single men, and single women. Similar estimates for married women are presented in section three, while wage and substitution elasticities are discussed briefly in section four. The final section contains a very brief summary and conclusion. (Author/JM) |
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| Item Description: | ERIC Document Number: ED102282. Sponsoring Agency: Office of Economic Opportunity, Washington, DC. |
| Physical Description: | 55 p. |