Essays on the impact of tax and transfer programs on aggregate labor supply

There are striking differences in hours of market work across countries. Given the welfare and policy implications of these differences, understanding the underlying sources is important. This dissertation is comprised of four essays related to the role of tax and transfer programs in accounting for the differences in aggregate hours worked between the U.S. and continental Europe. The measurement of the labor supply elasticity is also explored, as it has implications for this analysis.;The first essay develops a tractable general equilibrium model with an intensive and extensive margin of labor supply, and presents some of its implications for policy analysis. A key message is that the aggregate labor supply elasticity with respect to changes in taxes is a function not only of preference parameters, but also technology parameters.;In the second essay, the model is embedded into a life cycle setting and used to compute both micro labor elasticities using life cycle variation in hours and wages for prime age workers, and macro labor elasticities using variation in aggregate hours across economies with varying tax rates. Two key findings emerge: macro elasticities are virtually unrelated to micro elasticities, and macro elasticities are large.;The third essay explores the impact of human capital accumulation on estimates of the micro labor elasticity. The key finding is that the estimates depend critically on the portion of the life cycle that is being targeted. The largest estimates arise when basing estimation on only the beginning of the life cycle, but this leads to poor out of sample performance.;The fourth essay extends the previous analysis by explicitly modeling social security. The main finding is that differences in social security account for 35-40 percent of the differences in aggregate hours between the U.S. and continental Europe. Differences in the scale of benefits and in the eligibility rules associated with collecting social security are of roughly equal importance in accounting for these differences.;To conclude, tax and transfer programs, particularly social security, are important in accounting for the cross-country differences in aggregate hours. Furthermore, this result holds irrespective of the micro labor elasticity.