This Website uses cookies. By using this website you are agreeing to our use of cookies and to the terms and conditions listed in our data protection policy. Read more

Scandinavian Journal of Economics

The Anatomy of the Extensive Margin Labor Supply Response

Journal Article
Bastani, Spencer, Ylva Moberg and Håkan Selin (2021). “The Anatomy of the Extensive Margin Labor Supply Response”. Scandinavian Journal of Economics 123(1), 33–59.

Spencer Bastani, Ylva Moberg, Håkan Selin

We estimate how labor force participation among married women in Sweden responded to changing work incentives implied by a reform in the tax and transfer system in 1997. Using rich, population-wide, administrative data, we estimate an average participation elasticity of 0.13, thereby adding to the scarce literature estimating participation elasticities using quasi-experimental methods. We also highlight that estimated extensive margin responses necessarily are local to the observed equilibrium. Among low-income earners, elasticities are twice as large in the group with the lowest employment level, compared with the group with the highest employment level.

Spencer Bastani

+46 (0)18 471 7077
+46 (0)73 150 7751