Data for estimating the U.S. labor wedge

Abstract

The after-tax labor wedge is defined as the log difference between the MRS and the MPL excluding taxes. This article introduces the data and approach that are used to estimate the U.S. after-tax labor wedge to provide empirical support for the research article entitled ''Credit Crunch, Heterogeneity and the Labor Wedge'' (Zhang, 2018 (Forthcoming)) [4]. I measure the U.S. after-tax labor wedge and then decompose it into the sum of the gap between the MPL and the real wage (the MPL component) and the gap between the real wage and the MRS (the MRS component). The after-tax labor wedge and its decomposition are measured using quarterly data from 1947Q1 to 2017Q3. Keywords: Labor wedge, GDP, Business cycle, MRS, MPL