Working Paper: NBER ID: w22920
Authors: Garry Barrett; Daniel S. Hamermesh
Abstract: We measure the impact of measurement error in labor-supply elasticities estimated over recalled usual work hours, as is ubiquitous in the literature. Employing hours of work in diaries collected by the American Time Use Survey, 2003-12, along with the same respondents’ recalled usual hours, we show that the latter yield elasticities that are positively biased. We argue that this bias arises from the salience on recalled hours of differences in wage rates.
Keywords: No keywords provided
JEL Codes: C31; J22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Recalled usual hours (hcps) (I11) | positively biased estimates of labor supply elasticities (H31) |
| Wage rates of respondents (J31) | recalled usual hours (hcps) (I11) |
| Diary method (ha) (C41) | more accurate measure of hours worked (J22) |
| more accurate measure of hours worked (J22) | lower elasticity estimates (C51) |