I examine effects of labor income taxation in life‐cycle models with human capital accumulation. In this case, the opportunity cost of time equals the wage plus returns to work experience. This has several interesting consequences: First, the data appear consistent with larger labor supply...

The response of aggregate labor supply to various changes in the economic environment is central to many economic issues, especially the optimal design of tax policies. This paper surveys recent work that uses structural models and micro data to evaluate the size of this response. Whereas the...

The response of aggregate labor supply to various changes in the economic environment is central to many economic issues, including the optimal design of tax policies. Whereas the earlier literature often concluded that aggregate labor supply elasticities were small, we argue that recent work...