Labor Supply and Optimization Frictions: Evidence from the Danish student labor market
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- Labour Supply and Optimization Friction
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In this paper I investigate the nature of optimization frictions by studying the labor market of Danish students. This particular labor market is an interesting case study as it features a range of special institutional settings that affect students’ incentive to earn income and comparing outcomes across these setting effectively allow you to distinguish between different types of frictions. I find that the considered labor market is significantly affected by optimizations frictions, which masks the bunching at kink points normally associated with a positive labor supply elasticity under standard theory. More concretely I find the dominate optimization friction to be individuals’ inattention about their earnings during the year, while real adjustment cost and gradual learning appears to be of less importance.
Translated title of the contribution | Arbejdsudbud og optimiseringsfriktioner: Empiri fra det danske studenterarbejdsmarked |
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Original language | English |
Publisher | Economic Policy Research Unit. Department of Economics, University of Copenhagen |
ISBN (Electronic) | 0908‐7745 |
Publication status | Published - Dec 2014 |
Series | EPRU Working Paper Series |
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ISSN | 0908-7745 |
Bibliographical note
JEL Classification: H21, H24, J22
- Faculty of Social Sciences
Research areas
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ID: 188359945