@TechReport{iza:izadps:dp16414, author={Battisti, Michele and Michaels, Ryan and Park, Choonsung}, title={Labor Supply within the Firm}, year={2023}, month={Aug}, institution={Institute of Labor Economics (IZA)}, address={Bonn}, type={IZA Discussion Paper}, number={16414}, url={https://www.iza.org/index.php/publications/dp16414}, abstract={There is substantial variation in working time even within employer-employee matches, and yet estimates of the Frisch elasticity of labor supply can be near zero. This paper proposes a tractable theory of earnings and working time to interpret these observations. Production complementarities attenuate the response of working time to idiosyncratic, or worker-specific, shocks, but…firm-wide shocks are mediated by preference parameters. The model can be identified using…firm-worker matched data, revealing a Frisch elasticity of around 0.5. A quasi-experimental approach that exploits only idiosyncratic variation would find an elasticity less than half this.}, keywords={Frisch elasticity;production complementarities;labour supply}, }