The Frisch elasticity in a labor market with high job mobility
Por Nikita Céspedes ; Rendón, Silvio
October 2012
Idioma: Spanish
Keywords
- Frisch elasticity
- labor mobility
- labor supply
- working hours
Clasificación JEL:
- E24
- J22
- J24
- J41
- J60
- J63
Resumen:
In this paper we estimate Frisch elasticity in a labor market with high job mobility. We perform a fixed effects estimation following MaCurdy (1981) with a Heckman selection correction. The positive slope of the labor supply is identified by using instrumental variables related to changes in returns to education and experience. We use firm size as a labor demand shifter. We use data from the Permanent Employment Survey of Lima and find that Frisch elasticity is around 0.38, which indicates a relatively flexible labor market. Moreover, we find that this flexibility increases over time as well as income and hours of work.