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Employment and Labor Markets

The level of employment has a direct effect on people's well-being and the government's finances. When employment is higher, incomes and federal revenues are higher, while federal outlays for income support programs are lower. CBO analyzes the causes and consequences of unemployment, the effects of the unemployment insurance program, the impact of various policy proposals that might affect employment, and other issues concerning labor markets such as people's participation in the labor force.

Sub-Topics:

  • Federal Personnel
  • Labor Markets
  • Economic Stimulus
  • NAFTA

monthly archive

  • May 2013 (2)
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  • March 2013 (22)
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  • December 2012 (4)
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  • August 2012 (5)
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  • June 2012 (8)
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How Does CBO Model the Response of Labor Supply to Changes in Tax and Spending Policies?

blog post

October 25, 2012


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related publications


  • A Review of Recent Research on Labor Supply Elasticities: Working Paper 2012-12

    October 25, 2012

  • Review of Estimates of the Frisch Elasticity of Labor Supply: Working Paper 2012-13

    October 25, 2012
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How the Supply of Labor Responds to Changes in Fiscal Policy

report

October 25, 2012

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related publications


  • How the Supply of Labor Responds to Changes in Fiscal Policy

    October 25, 2012
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A Review of Recent Research on Labor Supply Elasticities: Working Paper 2012-12

working paper

October 25, 2012

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Abstract

Robert McClelland and Shannon Mok

This paper updates a review conducted by CBO in 1996 in which the agency evaluated the academic research on the effects of changes in after-tax wages on labor supply in the U.S. economy. That review concluded that substitution elasticities were larger in absolute value than income elasticities and that the decision to work was more responsive to after-tax wages than was the choice of hours. In this update, we find that for men and single women, estimates of substitution elasticities have increased, and income elasticities still appear to be smaller in absolute value than substitution elasticities. We also find that labor supply elasticities of married women have fallen substantially in the last three decades, although they are still higher than the elasticities of men and unmarried women. Based on our review, the elasticities of broad measures of income (total income less capital gains) from tax return data are in most instances consistent with the labor supply elasticities estimated using survey data. We find little compelling evidence that high-income taxpayers have substantially higher elasticities with respect to their labor input than other taxpayers: While some studies have estimated higher elasticities of broad income among high-income taxpayers, those results appear to reflect those taxpayers’ greater ability to time their income. In contrast, we find evidence that low-income workers have higher elasticities of labor supply than other workers, especially in the component of their labor response that reflects movement in and out of the workforce.


monthly archive

  • May 2013 (2)
  • April 2013 (14)
  • March 2013 (22)
  • February 2013 (10)
  • January 2013 (11)
  • December 2012 (4)
  • November 2012 (10)
  • October 2012 (4)
  • September 2012 (6)
  • August 2012 (5)
  • July 2012 (11)
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CBO Releases a Report on the Taxation of Capital and Labor Through the Self-Employment Tax

blog post

September 27, 2012


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The Taxation of Capital and Labor Through the Self-Employment Tax

report

September 27, 2012

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related publications


  • H.R. 3409, Coal Miner Employment and Domestic Energy Infrastructure Protection Act

    May 03, 2012

  • H.R. 910, Energy Tax Prevention Act of 2011

    March 30, 2011

  • H.R. 2401, Transparency in Regulatory Analysis of Impacts on the Nation Act of 2011

    July 18, 2011

  • H.R. 2273, Coal Residuals Reuse and Management Act of 2011

    August 01, 2011

  • H.R. 2018, Clean Water Cooperative Federalism Act of 2011

    June 30, 2011
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H.R. 3409, Coal Miner Employment and Domestic Energy Infrastructure Protection Act

cost estimate

September 18, 2012

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H.R. 6016, Government Employee Accountability Act

cost estimate

September 14, 2012

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H.R. 6365, National Security and Job Protection Act

cost estimate

September 12, 2012

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S. 3457, Veterans Jobs Corps Act of 2012

cost estimate

September 10, 2012

read complete document  (pdf, 81 kb)

monthly archive

  • May 2013 (2)
  • April 2013 (14)
  • March 2013 (22)
  • February 2013 (10)
  • January 2013 (11)
  • December 2012 (4)
  • November 2012 (10)
  • October 2012 (4)
  • September 2012 (6)
  • August 2012 (5)
  • July 2012 (11)
  • June 2012 (8)
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CBO Releases Latest Quarterly Report on ARRA’s Effect on Output and Employment

blog post

August 23, 2012


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