In this paper we compare, in a fully consistent manner, micro and macro labor supply
elasticities. The individual elasticity is obtained from the Panel Study of Income Dynamics
(PSID). The aggregate, time-series, elasticity is estimated from the aggregation of individual
units in the PSID for each year. We rely on exact aggregation of first-order conditions in a
lifecycle labor supply model with home production. We find an individual elasticity of
approximately 0.1, a low value that is in accordance with standard micro estimates. At the same
time, we find an aggregate elasticity near 1. This result derives from a pure aggregation effect,
with most of the difference due to the extensive margin. An implication of our result is that micro
evidence is not always a reliable guide for calibrating aggregate macroeconomic parameters.
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