Estimating the elasticity of labor supply utilizing a quasi-natural experiment

Author
Keywords
Abstract

Monopsonistic wage-setting power requires that the supply of labor directed toward
individual establishments is upward sloping. This paper utilizes institutional features to
identify the supply curve. The elasticity of labor supply is estimated using data for the
Norwegian teacher labor market in a period where the only variation in the wage level was
determined centrally, and with information on whether there is excess demand or not at the
school level. In fixed effects models, the supply elasticity faced by individual schools is
estimated to about 1.5, and is in the range 1.0–1.9 in different model specification.

Year of Publication
2008
Number
536
Date Published
12/2008
Publication Language
eng
Citation Key
8098
URL
Working Papers