Reservation Raises: The Aggregate Labour Supply Curve at the Extensive Margin
Preston Mui, Benjamin Schoefer
Review of Economic Studies,
No. 1,
2025
Abstract
We measure desired labour supply at the extensive (employment) margin in two representative surveys of the U.S. and German populations. We elicit reservation raises: the percent wage change that renders a given individual indifferent between employment and nonemployment. It is equal to her reservation wage divided by her actual, or potential, wage. The reservation raise distribution is the nonparametric aggregate labour supply curve. Locally, the curve exhibits large short-run elasticities above 3, consistent with business cycle evidence. For larger upward shifts, arc elasticities shrink towards 0.5, consistent with quasi-experimental evidence from tax holidays. Existing models fail to match this nonconstant, asymmetric curve.
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Konjunktur aktuell: Frostige Aussichten für die deutsche Wirtschaft
Konjunktur aktuell,
No. 4,
2024
Abstract
Zur Jahreswende dürfte die weltweite Produktion weiterhin in etwa so schnell wie in der Dekade vor der Pandemie expandieren. Die Konjunktur im Euroraum ist nur verhalten, und die Stagnation der deutschen Wirtschaft setzt sich fort. Die Industrie verliert an internationaler Wettbewerbsfähigkeit. Unternehmen und Verbraucher halten sich aufgrund unklarer wirtschaftspolitischer Aussichten mit ihren Ausgaben zurück. Das Bruttoinlandsprodukt dürfte im Jahr 2024 um 0,2% sinken und im Jahr 2025 um 0,4% expandieren.
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East Germany
The Nasty Gap 30 years after unification: Why East Germany is still 20% poorer than the West Dossier In a nutshell The East German economic convergence process is hardly…
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The Distribution of National Income in Germany, 1992-2019
Stefan Bach, Charlotte Bartels, Theresa Neef
IWH Discussion Papers,
No. 25,
2024
Abstract
This paper analyzes the distribution and composition of pre-tax national income in Germany since 1992, combining personal income tax returns, household survey data, and national accounts. Inequality rose from the 1990s to the late 2000s due to falling labor incomes among the bottom 50% and rising incomes in the top 10%. This trend reversed after 2007 as labor incomes across the bottom 90% increased. The top 1% income share, dominated by business income, remained relatively stable between 1992 and 2019. A large share of Germany’s top 1% earners are non-corporate business owners in labor-intensive professions. At least half of the business owners in P99-99.9 and a quarter in the top 0.1% operate firms in professional services – a pattern mirroring the United States. From 1992 to 2019, Germany’s top 0.1% income concentration exceeded France’s and matched U.S. levels until the late 2000s.
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Alumni
IWH Alumni The IWH maintains contact with its former employees worldwide. We involve our alumni in our work and keep them informed, for example, with a newsletter. We also plan…
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Macroeconomic Reports
Macroeconomic Reports Local and global: IWH regularly provides current economic data – be it about the state of the East German economy, the macroeconomic development in Germany…
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Research Articles
Research Articles Explore cutting-edge research based on CompNet’s micro-aggregated firm-level data and related analytical tools. These articles cover empirical and theoretical…
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Policy Output
Reports › CompNet’s flagship and special reports provide in-depth, data-driven analysis on productivity, competitiveness, and related economic trends, using the latest CompNet…
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10th Vintage
The CompNet 10th Vintage Dataset 10th Vintage dataset is now available! The CompNet dataset provides a comprehensive set of micro-aggregated indicators, specifically designed to…
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Supervision and Research
Supervision and Research Research A dissertation is, of course, first and foremost an individual endeavour which, in addition to the purely intellectual demands, also requires a…
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