Description
Despite the implications for policy, empirical evidence on the relative importance of factors that shape labor supply responses is missing. This paper helps fill this gap and quantifies the role of information frictions vs. other frictions by combining notches in the Norwegian welfare system and quasi-experimental variation in access to information about the slope and location of kinks. While we estimate a frictionless elasticity of 0.3, overall frictions attenuate this elasticity by about 70 percent. We find the information letter increased the earnings elasticity from 0.06 to 0.15, implying that information frictions account for at least 30% of total attenuation.
Date made available | 2021 |
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Publisher | ICPSR - Interuniversity Consortium for Political and Social Research |
Date of data production | Jan 1 1993 - Dec 31 2016 |
Geographical coverage | Norway |