New evidence on labor supply: Employment versus hours elasticities by sex and marital status

Using the tri-annual micro panel data of the Survey of Income and Program Participation we estimate fixed effects labor supply models separating the extensive and intensive margins. The employment elasticity is + 0.6 for single men versus + 1.1 for married men; the employment elasticity is + 2.4 for single women versus + 1.8 for married women. The compensated hours worked elasticity is + 0.4 for employed single and married men and + 0.7 for employed single and married women. The implied aggregate employment elasticity of + 1.5 and hours per employee elasticity; of -+ 0.5 indicate employment fluctuations account for three-fourths of wage-induced variation in labor hours. (C) 1998 Elsevier Science B.V. All rights reserved.