Labour Supply and Incentives to Work in Europe

Labour Supply and Incentives to Work in Europe

Edited by Ramón Gómez-Salvador, Ana Lamo, Barbara Petrongolo, Melanie Ward and Etienne Wasmer

Labour Supply and Incentives to Work in Europe highlights recent developments in the labour supply in Europe and gives a detailed assessment of their link with economic policies and labour market institutions. Despite major changes in European labour supply during the past few decades, the existing literature still lacks a comprehensive study of the relationship between labour supply and labour market institutions from a macro perspective.


Marc Gurgand

Subjects: economics and finance, labour economics


Marc Gurgand Changes in women’s labour supply is not only one of the most dramatic features of recent decades: it is also one of the hardest to document in an analytic perspective. In the context of an ageing labour force, however, women’s participation is rightly considered a major issue and research that can clarify the underlying mechanisms is warranted. Still, this chapter illustrates that even to come up with stylized facts about three intertwined phenomena – participation, fertility, education – is a hard task. Although the authors provide gross evidence about raising participation, they do not document trends in the two other dimensions of interest. These are well known: in 30 years, the synthetic fertility index (average number of children per woman) has decreased from 2.48 to 2.13 in the USA, from 2.43 to 1.65 in the UK and from 1.92 to 1.54 in Sweden. In the USA, 42 per cent of females 25 to 34 years old have attained tertiary education in 2001, 29 per cent in the UK and 39 per cent in Sweden; only ten years back, these ratios were 31 per cent, 18 per cent and 28 per cent respectively. The individual behaviour that underlies these trends is extremely complex because each of the three dimensions considered here is dynamic in nature and involves potentially substantial individual heterogeneity. The simple model presented in the chapter illustrates the analytical difficulties implicit in this topic and the theoretical indeterminacy of the size and direction of many effects. The...

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