Level Of Labor Supply Research Articles

Retired Seniors’ Willingness, Behavior, and Influencing Factors of Labor Supply and also on the Importance of Reducing Smoking

Active aging is not only an effective strategy to deal with population aging but also an important method to increase the effective labor supply. The health, education and age of the retired are obviously affect labor supply. Using a typical sample survey, this paper analyzes the willingness and behavior of retired seniors to supply labor, via a labor participation model and a labor supply model. It verifies the direct effects of various factors of active aging on the labor participation decision and the level of labor supply of retired seniors. The results show that age, pension, health, and other income are the main factors that affect the labor participation decision of retired seniors while education level, health, pension, other income, the number of family members in need of care, and the interaction term of health and age are the main factors that affect the level of labor participation of retired seniors. The government should build a policy to tap the labor supply potential of retired seniors, such as proposing legislations to reduce cigarette smoking thus enhancing health of retired people.

Optimal fiscal policy in a model with inherited aspirations and habit formation

AbstractIn this paper, we analyze optimal fiscal policies in an overlapping generations framework, where preferences exhibit aspirations in consumption and environmental quality as well as habit formation. We focus on the second best policies when the government needs to finance a given stream of public expenditures by using distortionary taxes. We derive necessary and sufficient conditions under which the competitive equilibrium is characterized by levels of capital and environmental quality that are too small and a level of labor supply that is too large. Our numerical simulations show that an optimal fiscal policy can be used as an effective stabilization device and that when consumption taxes are fixed, the planner implements maintenance investment and capital income subsidies while financing public spending through labor and fixed consumption taxes.

Effects of Public Health Insurance on Labor Supply in Rural China

Purpose Since the implementation of the New Cooperative Medical Scheme (NCMS) in 2003, this program has experienced rapid growth. Even so, little is known about the association between NCMS expansion and labor force supply among rural residents in China. The purpose of this paper is to examine the effects of the NCMS on labor force supply for rural Chinese populations. Design/methodology/approach Using data from the China Health and Nutrition Survey (CHNS), a difference-in-differences (DD) approach is employed to estimate the impact of NCMS expansion on labor supply outcomes, including hours of worked in agriculture, off-farm labor force participation, not working, and weeks off due to illness. A number of falsification tests are conducted to identify whether the assumption of common trends of DD analyses is satisfied. The robustness of results is checked through additional estimation, including panel fixed effects and instrumental variable approach. Findings Results show that the NCMS expansion has a positive effect on the hours of worked in agriculture and off-farm labor force participation, and reduces the likelihood of not working and weeks off due to illness. The effect on hours of agricultural production is larger for male adults, those aged 50 or more, and individuals in low-income families. This study demonstrates the importance of potential health improvements from public health insurance in promoting rural residents’ labor productivity. Originality/value Studies concerning the effects of public health insurance on labor supply in developing countries remain limited. The findings of this study provide important insights into how public health insurance programs, like the NCMS, may affect patterns of labor supply among rural residents, and can help policymakers improve health policies aimed to reduce the number of uninsured farmers while maintaining high levels of labor supply, productivity, and health status among the most vulnerable of populations.

A Collective Household Model with Choice-Dependent Sharing Rules

This paper presents a collective household model in which there are marital gains to assortative spousal matching, individuals face a labor-leisure choice and intra-marital allocations are determined by an endogenous sharing rule that is driven by actual wage earnings. The latter two features of the model introduce the potential for inefficiently high levels of labor supply because spouses recognize that changes in their labor supply would influence not only total household income but also their respective shares in intra-household allocations. Nonetheless, when sex ratios are imbalanced or external distribution factors are not gender neutral, competition among potential spouses in the large marriage markets helps to generate maritally sustainable Pareto efficient levels of labor supply and intra-household allocations. In such cases, the sharing rule that supports the maritally sustainable and Pareto efficient equilibrium outcome is also unique for each couple along the assortative order.

Taxation and the Structure of Labor Markets: The Case of Corporatism

We propose an explanation for the wide variation in rates of taxation across developed economies, based on differences in labor market institutions. In economies, which feature centralized labor markets, taxes on labor input will be less distortionary than when labor supply is determined individually. Since the level of labor supply is set by a small group of decision-makers, these individuals will recognize the linkage between the taxes that workers pay and the benefits that they receive. Labor tax burdens are indeed higher in more corporatist nations, while nonlabor taxes are actually lower. There is also some evidence that the distortionary effects of labor taxes are lower in more corporatist economies.

Real Business Cycles: A New Keynesian Perspective

Real business cycle theory is the latest incarnation of the classical view of economic fluctuations. It assumes that there are large random fluctuations in the rate of technological change. In response to these fluctuations, individuals rationally alter their levels of labor supply and consumption. The business cycle is, according to this theory, the natural and efficient response of the economy to changes in the available production technology. In this essay, I appraise this newly revived approach to the business cycle. In my view, real business cycle theory does not provide an empirically plausible explanation of economic fluctuations. Both its reliance on large technological disturbances as the primary source of economic fluctuations and its reliance on the intertemporal substitution of leisure to explain changes in employment are fundamental weaknesses. Moreover, to the extent that it trivializes the social cost of observed fluctuations, real business cycle theory is potentially dangerous. The danger is that those who advise policymakers might attempt to use it to evaluate the effects of alternative macroeconomic policies or to conclude that macroeconomic policies are unnecessary.