Taxation and Aggregate Factor Supply: Preliminary Estimates / Michael J. Boskin, Lawrence J. Lau.

Format:

Book

Author/Creator:

Boskin, Michael J.

Contributor:

National Bureau of Economic Research.

Lau, Lawrence J.

Series:

Working Paper Series (National Bureau of Economic Research) no. w0221.

NBER working paper series no. w0221

Language:

English

Subjects (All):

Production (Economic theory).

Mathematical models.

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Taxation and Aggregate Factor Supply

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1977.

Cambridge, Mass. : National Bureau of Economic Research, 1977.

Summary:

This paper extends the analysis of aggregate factor supply to a model which accounts simultaneously for the consumption/saving and labor/leisure choices. A translog utility maximization model is used to derive the set of consumption and leisure demand equations; these in turn are estimated on U.S. aggregate time series data. The empirical results are striking: we estimate (quite precisely) substantial own and cross price elasticities for current and future consumption and labor supply. The implied interest elasticity of saving is approximately 0.4.The results suggest that previous studies of labor supply and/or consumption which have ignored cross-price effects are mis-specified. We also strongly reject the hypothesis that implicit social security had no effect on factor supply.

Notes:

Print version record

December 1977.