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Using Labor Supply Elasticities to Learn about Income Inequality : The Role of Productivities versus Preferences (Inglés)

This paper argues that labor supply elasticities encode information about the determinants of income inequality. In the theoretical framework, individuals choose labor supply conditional on productivities and preferences for consumption relative to leisure. The paper shows that reduced-form labor supply elasticities allow one to isolate the components of income due to productivities versus preferences. The paper then investigates what labor supply...
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