Frisch elasticity of labor supply
Encyclopedia
Named after Ragnar Frisch, the Frisch elasticity of labor supply captures the elasticity
of hours worked to the wage
rate, given a constant marginal utility
of consumption. In other words, Frisch elasticity measures the substitution effect of a change in the wage rate on labor supply.
Elasticity (economics)
In economics, elasticity is the measurement of how changing one economic variable affects others. For example:* "If I lower the price of my product, how much more will I sell?"* "If I raise the price, how much less will I sell?"...
of hours worked to the wage
Wage
A wage is a compensation, usually financial, received by workers in exchange for their labor.Compensation in terms of wages is given to workers and compensation in terms of salary is given to employees...
rate, given a constant marginal utility
Marginal utility
In economics, the marginal utility of a good or service is the utility gained from an increase in the consumption of that good or service...
of consumption. In other words, Frisch elasticity measures the substitution effect of a change in the wage rate on labor supply.