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Benefit generosity and the income effect on labour supply: quasi‐experimental evidence

Citation

Danzer, Alexander M. (2013). Benefit generosity and the income effect on labour supply: quasi‐experimental evidence. The Economic Journal, 123(571), 1059-1084.

Abstract

This study uses an unanticipated, exogenous doubling of the legal minimum pension in Ukraine as a unique quasi-experiment to evaluate the income effect on various aspects of labour supply among the elderly. In contrast to previous studies, the unusually simple pension eligibility rule allows estimating a pure causal income effect. Applying reduced form difference-in-differences and regression discontinuity as well as instrumental variable methods on two nationally representative data sets yields a retirement semi-elasticity of 0.1–0.2. Men and women respond at different margins of labour supply but with similar overall effect.

URL

http://dx.doi.org/10.1111/ecoj.12006

Reference Type

Journal Article

Year Published

2013

Journal Title

The Economic Journal

Author(s)

Danzer, Alexander M.