Employment and pay

Labour supply and earned income underpin the standard of living of individuals and their families. The choices to enter work and how much to work cannot be fully understood in a static framework by looking at each period of life on its own. Instead, they are closely linked to early education choices and to further investments in skills during the working career. Over the course of life, the interactions between labour supply and these investments determine earnings, their progression and, ultimately, economic wellbeing.

Seminal work at the IFS has set the research agenda on labour supply, skills and wages, and their interplay with the tax and benefit system. This included groundbreaking work on modelling labour supply, measuring labour supply responses to changes in take-home pay, explaining retirement choices, characterising the distribution of wages and understanding wage progression. Much of this research was supported by TaxBen, the in-house detailed tax microsimulator that we have built and maintained since the early 1990s. TaxBen also supports our policy commentary on employment and pay related issues.

Our current research builds on the methods and insights of these early contributions. It aims to better explain the dynamic aspects of labour supply and earnings over the course of life, by relating them to the formation of skills, the family and the process of family formation, the uncertainties faced by individuals and their families, the persistent economic inequalities and the incentives created by the tax and benefit system. Our research is also seeking to analyse the determinants of recent trends in labour market productivity, which is key to understand the drop in productivity after the Great Recession after a long period of stable growth.

Journal Article | Journal of Political Economy
We extend the collective model of household behavior to allow for the existence of public consumption.
Book Chapters
This chapter in a Handbook of Labor Economics (North Holland) surveys existing approaches to modeling labor supply and identifies important gaps in the literature that could be addressed in future research.

Contacts

Contact IFS on 020 7291 4800 or mailbox@ifs.org.uk

Monica Costa Dias

Monica Costa Dias

Associate Director

Andrew Hood

Andrew Hood

Senior Research Economist

Robert Joyce

Robert Joyce

Associate Director

Barra Roantree

Barra Roantree

Research Economist

Richard Blundell

Richard Blundell

Director of CPP

Sarah Cattan

Sarah Cattan

Associate Director

Mariacristina De Nardi

Mariacristina De Nardi

International Research Fellow

Eric French

Eric French

Co-Director, CPP

Rachel Griffith

Rachel Griffith

Research Director

Hilary Hoynes

Hilary Hoynes

International Research Fellow

Paul Johnson

Paul Johnson

Director

Costas Meghir

Costas Meghir

Research Fellow

Magne Mogstad

Magne Mogstad

International Research Fellow

Agnes Norris Keiller

Agnes Norris Keiller

Research Economist

Cormac O'Dea

Cormac O'Dea

International Research Fellow

Fabien Postel-Vinay

Fabien Postel-Vinay

Research Fellow

Jean-Marc Robin

Jean-Marc Robin

Research Fellow

Tom Waters

Tom Waters

Research Economist

James P. Ziliak

James P. Ziliak

Research Fellow