Labor supply responses to learning the tax and benefit schedule

Andreas R. Kostøl, Andreas S. Myhre

Research output: Contribution to journalArticlepeer-review

2 Scopus citations


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 versus 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 percent of total attenuation. (JEL D83, H24, I38, J22, J28, J31).

Original languageEnglish (US)
Pages (from-to)3733-3766
Number of pages34
JournalAmerican Economic Review
Issue number11
StatePublished - Nov 2021

ASJC Scopus subject areas

  • Economics and Econometrics


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