テクニカルレポート

ディスカッション／ワーキング・ペーパー

text

Institute of Social and Economic Research Discussion Papers. 2019, 1063, p. 1-29

Cross-Sectional and Aggregate Labor Supply

The Institute of Social and Economic Research, Osaka University

英語

text

2019-10

https://www.iser.osaka-u.ac.jp/library/dp/2019/DP1063.pdf

Standard heterogeneous agent macro models that highlight idiosyncratic productivity shocks do not generate the near zero cross-sectional correlation between hours and wages found in the data. We ask whether matching this moment matters for business cycle properties of these models. To do this we explore two extensions of the model in Chang et al. (2019) that can match this empirical cross-section correlation. One of these departs from the assumption of balanced growth preferences. The other introduces an idiosyncratic shock to the opportunity cost of market work that is highly correlated with the shock to market productivity. While both extensions can match the empirical correlation, they have large and opposing effects on the cyclical volatility of the labor market. We conclude that the cross-sectional moment is important for business cycle analysis and that more work is needed to distinguish the potential mechanisms that can generate it.

73364

Cross-Sectional and Aggregate Labor Supply

The Institute of Social and Economic Research, Osaka University

英語

2019-10

Institute of Social and Economic Research Discussion Papers

1063

1

29

https://hdl.handle.net/11094/73364

https://www.iser.osaka-u.ac.jp/library/dp/2019/DP1063.pdf