Is the Long-Run Labor Supply Vertical?
نویسندگان
چکیده
Growth theory and real-business-cycle theory virtually always assume that the long-run labor supply is vertical. This paper derives the restriction on preferences required for this assumption to hold and formulates an econometric method for testing this restriction. The restriction is then rejected using time-series data for the United States and many OECD countries. Some evidence against the restriction is also found using cross-sectional data for 133 countries from the Penn World Tables. The long-run labor supply therefore appears not to be vertical for many countries.
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