Labor Supply and Optimization Frictions:Evidence from the Danish student labor market

In this paper I investigate the nature of optimization frictions by studying the labor market of Danish students. This particular labor market is an interesting case study as it features a range of special institutional settings that affect students' incentive to earn income and comparing outcomes across these setting effectively allow you to distinguish between different types of frictions. I find that the considered labor market is significantly affected by optimizations frictions, which masks the bunching at kink points normally associated with a positive labor supply elasticity under standard theory. More concretely I find the dominate optimization friction to be individuals' inattention about their earnings during the year, while real adjustment cost and gradual learning appears to be of less importance

Labor supply and optimization frictions:Evidence from the Danish student labor market

Using Danish administrative data, I investigate the magnitude and nature of optimization frictions in the labor market of Danish students. Danish students face a unique institutional setting that makes it possible to distinguish between different types of frictions and estimate their effect on individual utility. I find that frictions significantly affect observed labor market outcomes. In particular, the empirical evidence points to inattention as the dominant type of friction. In contrast, my findings appear inconsistent with real adjustment costs, price misperception and gradual learning. Overall, optimization frictions reduce the utility of individuals by approximately 2-3 percent of disposable income

The long-run history of income inequality in Denmark:Top incomes from 1870 to 2010

We use historical publications and for more recent years micro-data from the income tax and wealth tax returns to estimate the development in income inequality in Denmark over the last 140 years. The paper breaks new ground in treating the specific features of the Danish Tax system and in analysing the implications of the switch from joint to individual taxation. We show that income inequality have declined substantially over the last century with an income share for the top 1 per cent dropping from 27.6 per cent from its peak in 1917 to 6.4 in 2010. However the decline is not simply a secular downward trend consistent with the downward part of a Kuznets curve. Instead there seems to be several distinct phases, interleaved with periods of stability

Does biology drive child penalties? Evidence from biological and adoptive families

This paper investigates whether the impact of children on the labor market outcomes of women relative to men—child penalties—can be explained by the biological links between mother and child. We estimate child penalties in biological and adoptive families using event studies around the arrival of children and almost 40 years of adoption data from Denmark. Short-run child penalties are slightly larger for biological mothers than for adoptive mothers, but their long-run child penalties are virtually identical and precisely estimated. This suggests that biology is not a key driver of child-related gender gaps

Children and gender inequality: evidence from Denmark

Using Danish administrative data, we study the impacts of children on gender inequality in the labor market. The arrival of children creates a long-run gender gap in earnings of around 20 percent driven by hours worked, participation, and wage rates. We identify mechanisms driving these "child penalties" in terms of occupation, sector, and firm choices. We find that the fraction of gender inequality caused by child penalties has featured a dramatic increase over the last three to four decades. Finally, we show that child penalties are transmitted through generations, from parents to daughters, suggesting an influence of childhood environment on gender identity