December 22, 2011

Estimating labour supply responses in the Netherlands using structural models

We exploit a very large administrative dataset to estimate labour supply elasticities for a large number of subgroups in the Netherlands. We estimate parameters for a broad set of preference specifications. We find that men and women have similar labour-supply elasticities when they are single.

When they form a couple men have much smaller elasticities than women, in particular when children are present. We also find that cross elasticities of men's wages on women's labour supply are substantial. Low skilled singles and single parents have much higher labour-supply elasticities than high skilled singles and single parents, whereas differences between skill types are less pronounced for couples. For all subgroups we find that the extensive margin (participation) is much more important than the intensive margin (hours per week). Women with children have the highest intensive margin response. Controlling for household type, we do not find a clear age pattern for labour-supply elasticities. Most of these results are in line with the findings on labour-supply elasticities abroad.

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Mauro Mastrogiacomo Read more
Nicole Bosch Read more
Miriam Gielen Read more
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Egbert Jongen +31 6 50746439 Read more

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