Labor Supply Elasticity in a Search Friction Model

Dados Bibliográficos

ID3348620
AutoresSimon M S Lo (0000-0003-1273-4645, Simon M. S. Lo is an Assistant Professor in Economics and Finance at the United Arab Emirates University, autor correspondente)
Ano2025
Volume78
Fascículo4
Páginas712-735
Data de publicação2025-08-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoIndustrial and Labor Relations Review (JOURNAL)
Identificadores do periódicoISSN: 0019-7939 • E-ISSN: 2162-271X
EditoraSAGE Publications Inc (PUBLISHER)
DOI10.1177/00197939251328290
OpenAlexW4409133204
IdiomaEN
Referências citadas44

Search friction induces stochastic noise that contributes to the eruptive property of the estimated labor supply elasticity and drives it toward zero. The author proposes a new estimation method that removes the stochastic disturbance and reveals the true structural elasticity, which is substantially larger than the spurious elasticity estimated using the benchmark neoclassical model. Results suggest that workers will change their jobs 3.3 times before they obtain the optimal job package predicted by the neoclassical model. Findings also show that a sufficient wage premium is required by workers to take up a job with undesired working hours

Composite material · Economics · Elasticity (physics) · Advanced Queuing Theory Analysis · Brake Systems and Friction Analysis · Materials Science