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We look at how strongly shocks to asset values affect labour supply, using Italian data. We use asset price shocks to provide a measure of wealth changes that is exogenous to households’ saving and labour supply. Our results point to significant effects of wealth on hours of work and on whether or not agents leave their jobs. The magnitude of these effects can be substantial, for example for those individuals who suffered larger wealth losses during the financial crisis. Family effects reflect similar responses from men and women on average. Older working-age individuals drive the population results.
Authors

Research Associate University of Bologna
Matthew is Associate Professor at the University of Bologna focusing on consumption and savings choices and how policy affects them.
Research Associate University of Bologna
Renata is an Associate Professor at the University of Bologna and IFS Research Associate, working on household consumption, saving and labour supply.

Serena Trucchi
Working Paper details
- DOI
- 10.1920/wp.ifs.2017.W1729
- Publisher
- The IFS
Suggested citation
R, Bottazzi and S, Trucchi and M, Wakefield. (2017). Labour supply responses to financial wealth shocks: evidence from Italy. London: The IFS. Available at: https://ifs.org.uk/publications/labour-supply-responses-financial-wealth-shocks-evidence-italy (accessed: 8 February 2025).
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