The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Labour Supply

  • Richard Blundell
  • Thomas MaCurdy
Reference work entry


The analysis of labour supply is placed in a general framework within which empirical models and their resulting elasticity estimates can be interpreted. An explicitly intertemporal life-cycle structure is developed for the choice of hours and participation. The relationship between economic substitution effects found in the labour supply literature and wage impacts on different concepts of employment is considered. We provide a separate discussion of the main issues surrounding the analysis of family labour supply and the analysis of the impact of taxation. We conclude with a discussion on the interpretation of labour supply elasticities for policy analysis.


Benefit take-up Collective models of the household Cost functions Dynamic programming Employment Engel curve Euler equations Frisch specification Hicksian effect Hours worked Indirect utility function Labour supply Linear expenditure system Marshallian effect Optimal taxation Reservation wage Retirement Slutsky effect Tax credits 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Richard Blundell
    • 1
  • Thomas MaCurdy
    • 1
  1. 1.