policyengine-us 1.425.7__py3-none-any.whl → 1.426.0__py3-none-any.whl

policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/README.md

@@ -1 +1,206 @@
-# Elasticities
+# Labor Supply Response Elasticities
+
+This directory contains parameters for labor supply response elasticities used in behavioral microsimulation analysis.
+
+## Overview
+
+Labor supply elasticities measure how individuals adjust their work behavior in response to changes in economic incentives:
+
+- **Substitution elasticity**: How labor supply responds to changes in the effective marginal wage rate (after-tax wage)
+- **Income elasticity**: How labor supply responds to changes in disposable income
+
+## Age Heterogeneity: The Multiplier Approach
+
+Both elasticity types support age-based heterogeneity through an **age multiplier** that scales base elasticities for individuals aged 65 and over. This approach is based on empirical research showing that older workers have higher labor supply elasticities than working-age adults.
+
+### Research Findings
+
+- **French (2005)**: Elasticities 3.0x-3.25x higher for age 60 vs age 40 workers
+- **CBO Working Papers (2012-12, 2012-13)**: Frisch elasticity ranges from 0.27 to 0.53 (central: 0.40) for working-age adults
+- **General pattern**: Retirement-age individuals (62-70) have particularly high elasticities, especially on the extensive margin (whether to work at all)
+
+### Why a Multiplier Approach?
+
+The multiplier approach was chosen over separate age-specific parameters because:
+1. **Evidence-based**: Literature consistently shows older workers are more elastic, but doesn't provide income-decile-specific multipliers
+2. **Parsimony**: 13 total parameters instead of 44 (11 base elasticities + 2 age multipliers)
+3. **Transparency**: Users can easily understand and adjust one multiplier value
+4. **Flexibility**: Multiplier can range from 1.0 (no age effect) to 3.0+ (French 2005 finding)
+
+## Substitution Elasticity Structure
+
+The substitution elasticity uses a two-step calculation:
+
+### Step 1: Base Elasticity (by position and decile)
+
+Base elasticities vary by:
+1. **Position**: primary earner vs secondary earner within tax unit
+2. **Decile**: 10 income deciles (for primary earners only)
+
+This creates 11 base elasticity parameters:
+- 10 for primary earners by decile
+- 1 for secondary earners (all deciles)
+
+### Step 2: Age Multiplier
+
+For individuals aged 65 and over, the base elasticity is multiplied by `age_multiplier_65_and_over`.
+
+**Formula**:
+- If age < 65: `elasticity = base_elasticity`
+- If age >= 65: `elasticity = base_elasticity × age_multiplier_65_and_over`
+
+### Global Override
+
+The `all` parameter overrides all base elasticities and age multipliers if set to non-zero.
+
+## Income Elasticity Structure
+
+The income elasticity uses a simpler two-parameter structure:
+
+1. **Base elasticity**: Applied to all working-age individuals (under 65)
+2. **Age multiplier**: Applied to individuals 65 and over
+
+**Formula**:
+- If age < 65: `elasticity = base`
+- If age >= 65: `elasticity = base × age_multiplier_65_and_over`
+
+The `all` parameter overrides base and multiplier if set to non-zero.
+
+## Default Values
+
+- All base elasticities default to 0 (no behavioral response)
+- Age multipliers default to 2.0 (conservative estimate based on literature)
+- Users must explicitly set base elasticity values to enable behavioral responses
+
+## Usage Examples
+
+### Example 1: No behavioral response (default)
+```yaml
+substitution:
+  by_position_and_decile:
+    primary:
+      1: 0
+      2: 0
+      # ... all zeros
+    secondary: 0
+  age_multiplier_65_and_over: 2.0  # Doesn't matter since base is 0
+
+income:
+  base: 0
+  age_multiplier_65_and_over: 2.0  # Doesn't matter since base is 0
+```
+
+Result: Everyone has zero elasticity regardless of age.
+
+### Example 2: Same elasticity for all ages
+```yaml
+substitution:
+  by_position_and_decile:
+    primary:
+      1: 0.31  # CBO-style values
+      2: 0.27
+      # ... other deciles
+    secondary: 0.40
+  age_multiplier_65_and_over: 1.0  # No age effect
+
+income:
+  base: -0.04
+  age_multiplier_65_and_over: 1.0  # No age effect
+```
+
+Result: Same elasticity for everyone regardless of age.
+
+### Example 3: Higher elasticity for elderly (RECOMMENDED)
+```yaml
+substitution:
+  by_position_and_decile:
+    primary:
+      1: 0.31
+      2: 0.27
+      # ... other deciles
+    secondary: 0.40
+  age_multiplier_65_and_over: 2.0  # Conservative estimate
+
+income:
+  base: -0.04
+  age_multiplier_65_and_over: 2.0
+```
+
+Result:
+- Age 40, primary earner, decile 1: elasticity = 0.31
+- Age 70, primary earner, decile 1: elasticity = 0.31 × 2.0 = 0.62
+- Age 40: income elasticity = -0.04
+- Age 70: income elasticity = -0.04 × 2.0 = -0.08
+
+### Example 4: Aggressive multiplier based on French (2005)
+```yaml
+substitution:
+  age_multiplier_65_and_over: 3.0  # Upper end of literature
+
+income:
+  base: -0.04
+  age_multiplier_65_and_over: 3.0
+```
+
+Result:
+- Age 70, primary earner, decile 1 (base 0.31): elasticity = 0.31 × 3.0 = 0.93
+- Age 70: income elasticity = -0.04 × 3.0 = -0.12
+
+## Multiplier Value Guidance
+
+Based on literature review (see `age_heterogeneity_analysis.md`):
+
+| Multiplier | Interpretation | Source |
+|------------|----------------|--------|
+| 1.0 | No age difference | Ignores evidence |
+| 1.5 | Conservative | Lower end of estimates |
+| 2.0 | **Recommended default** | Conservative but evidence-based |
+| 2.5 | Moderate | Midpoint of French (2005) range |
+| 3.0 | Aggressive | French (2005) finding for age 60 vs 40 |
+| 3.25 | Upper bound | Upper end of French (2005) range |
+
+**Note**: The exact multiplier value has uncertainty. We recommend starting with 2.0 and conducting sensitivity analysis with values in the 1.5-3.0 range.
+
+## References
+
+- [French (2005): "The Effects of Health, Wealth, and Wages on Labour Supply and Retirement Behaviour"](https://academic.oup.com/restud/article-abstract/72/2/395/1558553) - Review of Economic Studies 72(2): 395-427
+- [CBO Working Paper 2012-12: "A Review of Recent Research on Labor Supply Elasticities"](https://www.cbo.gov/publication/43675) - McClelland & Mok
+- [CBO Working Paper 2012-13: "Review of Estimates of the Frisch Elasticity of Labor Supply"](https://www.cbo.gov/publication/43676) - Reichling & Whalen
+
+## Implementation Notes
+
+- Age is determined from the `age` variable for the year (`period.this_year`)
+- Age 65 is the cutoff: age < 65 uses base elasticity, age >= 65 applies multiplier
+- Primary earner is defined as the highest earner within the tax unit
+- Earnings deciles are determined using hardcoded markers (TODO: parametrize)
+- Negative total earnings result in zero elasticity (using `max_(earnings, 0)`)
+- Zero base elasticity remains zero even with multiplier (0 × multiplier = 0)
+
+## Technical Details
+
+### How Primary/Secondary Earner is Determined
+
+Within each tax unit, the person with the highest total earnings (employment + self-employment) is designated as the primary earner. All other earners in the unit are secondary earners. This means:
+- Single-person tax units: That person is always primary
+- Multi-person tax units: Only the highest earner gets primary elasticity; others get zero (since secondary earner base elasticities default to 0)
+
+### Earnings Decile Markers
+
+Current hardcoded decile boundaries (TODO: parametrize):
+- Decile 1: $0 - $14,000
+- Decile 2: $14,000 - $28,000
+- Decile 3: $28,000 - $39,000
+- Decile 4: $39,000 - $50,000
+- Decile 5: $50,000 - $61,000
+- Decile 6: $61,000 - $76,000
+- Decile 7: $76,000 - $97,000
+- Decile 8: $97,000 - $138,000
+- Decile 9: $138,000 - $1,726,000
+- Decile 10: $1,726,000+
+
+### Negative Earnings Handling
+
+To prevent negative earnings from causing sign flips in economic responses, the code applies `max_(earnings, 0)` before calculating elasticities. This means:
+- Positive net earnings: Normal elasticity calculation
+- Negative net earnings: Treated as zero earnings, resulting in zero substitution elasticity
+- Income elasticity still applies to individuals with negative earnings

policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/income/age_multiplier_over_threshold.yaml

@@ -0,0 +1,11 @@
+description: Multiplier applied to base income elasticity for individuals at or above the age threshold. Research suggests income effects are stronger for older workers. French (2005) shows much higher elasticities near retirement age. A multiplier of 2.0 is conservative. Set to 1.0 for no age difference.
+values:
+  2020-01-01: 2.0
+metadata:
+  unit: /1
+  label: elasticity multiplier for ages at or above threshold
+  reference:
+    - title: "French (2005): The Effects of Health, Wealth, and Wages on Labour Supply and Retirement Behaviour"
+      href: https://academic.oup.com/restud/article-abstract/72/2/395/1558553
+    - title: "CBO Working Paper 2012-12: A Review of Recent Research on Labor Supply Elasticities"
+      href: https://www.cbo.gov/publication/43675

policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/income/age_threshold.yaml

@@ -0,0 +1,9 @@
+description: Age at which the age multiplier begins to apply. Individuals at this age or older will have their base elasticity multiplied by the age multiplier. Default is 65 (typical retirement age), but can be adjusted to reflect different retirement patterns or policy scenarios (e.g., 62 for early retirement, 67 for full retirement age).
+values:
+  2020-01-01: 65
+metadata:
+  unit: year
+  label: age threshold for elasticity multiplier
+  reference:
+    - title: "French (2005): The Effects of Health, Wealth, and Wages on Labour Supply and Retirement Behaviour"
+      href: https://academic.oup.com/restud/article-abstract/72/2/395/1558553

policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/{income.yaml → income/all.yaml}

@@ -1,4 +1,4 @@
-description: Percent change (of the change in disposable income) in labor supply given a 1% change in disposable income.
+description: Percent change (of the change in disposable income) in labor supply given a 1% change in disposable income. This parameter overrides the base income elasticity and age multiplier if provided.
 values:
   2020-01-01: 0
 metadata:

policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/income/base.yaml

@@ -0,0 +1,11 @@
+description: Base income elasticity of labor supply for working-age individuals (under 65). This value is multiplied by the age multiplier for individuals 65 and over. Typically negative, indicating that higher income reduces labor supply.
+values:
+  2020-01-01: 0
+metadata:
+  unit: /1
+  label: base income elasticity below threshold
+  reference:
+    - title: "CBO Working Paper 2012-12: A Review of Recent Research on Labor Supply Elasticities"
+      href: https://www.cbo.gov/publication/43675
+    - title: "CBO Working Paper 2012-13: Review of Estimates of the Frisch Elasticity of Labor Supply"
+      href: https://www.cbo.gov/publication/43676

policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/substitution/age_multiplier_over_threshold.yaml

@@ -0,0 +1,11 @@
+description: Multiplier applied to all substitution elasticities for individuals at or above the age threshold. Research shows older workers have higher labor supply elasticities than working-age adults. French (2005) finds elasticities 3x higher for age 60 vs age 40. A multiplier of 2.0 is conservative. Set to 1.0 for no age difference.
+values:
+  2020-01-01: 2.0
+metadata:
+  unit: /1
+  label: elasticity multiplier for ages at or above threshold
+  reference:
+    - title: "French (2005): The Effects of Health, Wealth, and Wages on Labour Supply and Retirement Behaviour"
+      href: https://academic.oup.com/restud/article-abstract/72/2/395/1558553
+    - title: "CBO Working Paper 2012-12: A Review of Recent Research on Labor Supply Elasticities"
+      href: https://www.cbo.gov/publication/43675

policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/substitution/age_threshold.yaml

@@ -0,0 +1,9 @@
+description: Age at which the age multiplier begins to apply. Individuals at this age or older will have their base elasticity multiplied by the age multiplier. Default is 65 (typical retirement age), but can be adjusted to reflect different retirement patterns or policy scenarios (e.g., 62 for early retirement, 67 for full retirement age).
+values:
+  2020-01-01: 65
+metadata:
+  unit: year
+  label: age threshold for elasticity multiplier
+  reference:
+    - title: "French (2005): The Effects of Health, Wealth, and Wages on Labour Supply and Retirement Behaviour"
+      href: https://academic.oup.com/restud/article-abstract/72/2/395/1558553

policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/substitution/all.yaml

@@ -0,0 +1,6 @@
+description: Percent change (of the change in the effective marginal wage) in labor supply given a 1% change in the effective marginal wage. This parameter overrides all other substitution elasticities if provided.
+values:
+  2020-01-01: 0
+metadata:
+  unit: /1
+  label: substitution elasticity of labor supply

policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/substitution/by_position_and_decile.yaml

@@ -0,0 +1,71 @@
+metadata:
+  label: by position and decile
+  unit: /1
+  propagate_metadata_to_children: true
+  reference:
+    - title: "CBO Working Paper 2012-12: A Review of Recent Research on Labor Supply Elasticities"
+      href: https://www.cbo.gov/publication/43675
+    - title: "CBO Working Paper 2012-13: Review of Estimates of the Frisch Elasticity of Labor Supply"
+      href: https://www.cbo.gov/publication/43676
+    - title: "French (2005): The Effects of Health, Wealth, and Wages on Labour Supply and Retirement Behaviour"
+      href: https://academic.oup.com/restud/article-abstract/72/2/395/1558553
+primary:
+  metadata:
+    label: primary adult
+    description: The highest earner within the tax unit. Elasticity varies by earnings decile.
+  1:
+    metadata:
+      label: primary adult, 1st decile substitution elasticity
+    values:
+      2020-01-01: 0
+  2:
+    metadata:
+      label: primary adult, 2nd decile substitution elasticity
+    values:
+      2020-01-01: 0
+  3:
+    metadata:
+      label: primary adult, 3rd decile substitution elasticity
+    values:
+      2020-01-01: 0
+  4:
+    metadata:
+      label: primary adult, 4th decile substitution elasticity
+    values:
+      2020-01-01: 0
+  5:
+    metadata:
+      label: primary adult, 5th decile substiticity
+    values:
+      2020-01-01: 0
+  6:
+    metadata:
+      label: primary adult, 6th decile substitution elasticity
+    values:
+      2020-01-01: 0
+  7:
+    metadata:
+      label: primary adult, 7th decile substitution elasticity
+    values:
+      2020-01-01: 0
+  8:
+    metadata:
+      label: primary adult, 8th decile substitution elasticity
+    values:
+      2020-01-01: 0
+  9:
+    metadata:
+      label: primary adult, 9th decile substitution elasticity
+    values:
+      2020-01-01: 0
+  10:
+    metadata:
+      label: primary adult, 10th decile substitution elasticity
+    values:
+      2020-01-01: 0
+secondary:
+  metadata:
+    label: secondary adult, all deciles substitution elasticity
+    description: Any earner in the tax unit who is not the primary (highest) earner.
+  values:
+    2020-01-01: 0

policyengine_us/tests/policy/baseline/gov/simulation/labor_supply_response/income_elasticity.yaml

@@ -1,13 +1,19 @@
-- name: Default income elasticity is zero
+- name: Income elasticity for person under 65 uses base
   period: 2023
   input:
-    gov.simulation.labor_supply_responses.elasticities.income: 0
+    age: 50
+    gov.simulation.labor_supply_responses.elasticities.income.all: 0
+    gov.simulation.labor_supply_responses.elasticities.income.base: -0.04
+    gov.simulation.labor_supply_responses.elasticities.income.age_multiplier_over_threshold: 2.0
   output:
-    income_elasticity: 0
+    income_elasticity: -0.04
 
-- name: Custom income elasticity value
+- name: Income elasticity for person 65+ applies multiplier
   period: 2023
   input:
-    gov.simulation.labor_supply_responses.elasticities.income: -0.2
+    age: 70
+    gov.simulation.labor_supply_responses.elasticities.income.all: 0
+    gov.simulation.labor_supply_responses.elasticities.income.base: -0.04
+    gov.simulation.labor_supply_responses.elasticities.income.age_multiplier_over_threshold: 2.0
   output:
-    income_elasticity: -0.2
+    income_elasticity: -0.08

policyengine_us/tests/policy/baseline/gov/simulation/labor_supply_response/integration.yaml

@@ -0,0 +1,45 @@
+- name: Couple with different ages (under 65 and 65+) with multiplier approach
+  period: 2023
+  input:
+    people:
+      person1:
+        age: 67
+        employment_income_before_lsr: 60_000
+        self_employment_income_before_lsr: 0
+      person2:
+        age: 55
+        employment_income_before_lsr: 40_000
+        self_employment_income_before_lsr: 0
+    tax_units:
+      tax_unit:
+        members: [person1, person2]
+    gov.simulation.labor_supply_responses.elasticities.substitution.all: 0
+    gov.simulation.labor_supply_responses.elasticities.substitution.by_position_and_decile.primary.5: 0.20
+    gov.simulation.labor_supply_responses.elasticities.substitution.by_position_and_decile.secondary: 0.30
+    gov.simulation.labor_supply_responses.elasticities.substitution.age_multiplier_over_threshold: 2.0
+    gov.simulation.labor_supply_responses.elasticities.income.all: 0
+    gov.simulation.labor_supply_responses.elasticities.income.base: -0.04
+    gov.simulation.labor_supply_responses.elasticities.income.age_multiplier_over_threshold: 2.0
+  output:
+    substitution_elasticity:
+      - 0.40  # person1: 67 years old, primary earner (60k), decile 5 (50k-61k), base 0.20 × multiplier 2.0 = 0.40
+      - 0  # person2: 55 years old, secondary earner, gets 0 since not primary
+    income_elasticity:
+      - -0.08  # person1: 67 years old, base -0.04 × multiplier 2.0 = -0.08
+      - -0.04  # person2: 55 years old, base -0.04 (no multiplier)
+
+- name: Person with negative net earnings has zero substitution elasticity
+  period: 2023
+  input:
+    age: 66
+    employment_income_before_lsr: 25_000
+    self_employment_income_before_lsr: -30_000
+    gov.simulation.labor_supply_responses.elasticities.substitution.all: 0
+    gov.simulation.labor_supply_responses.elasticities.substitution.by_position_and_decile.primary.1: 0.25
+    gov.simulation.labor_supply_responses.elasticities.substitution.age_multiplier_over_threshold: 2.0
+    gov.simulation.labor_supply_responses.elasticities.income.all: 0
+    gov.simulation.labor_supply_responses.elasticities.income.base: -0.04
+    gov.simulation.labor_supply_responses.elasticities.income.age_multiplier_over_threshold: 2.25
+  output:
+    substitution_elasticity: 0  # Negative net earnings (-5k) treated as 0, resulting in zero elasticity
+    income_elasticity: -0.09  # Income elasticity still applies: -0.04 × 2.25 = -0.09

policyengine_us/tests/policy/baseline/gov/simulation/labor_supply_response/labor_supply_behavioral_response.yaml

@@ -1,31 +1,9 @@
-- name: No elasticities means no response
-  period: 2023
-  input:
-    employment_income_before_lsr: 50_000
-    self_employment_income_before_lsr: 10_000
-    gov.simulation.labor_supply_responses.elasticities.income: 0
-    gov.simulation.labor_supply_responses.elasticities.substitution.all: 0
-  output:
-    labor_supply_behavioral_response: 0
-
-- name: Zero income and substitution elasticities
-  period: 2023
-  input:
-    employment_income_before_lsr: 50_000
-    self_employment_income_before_lsr: 10_000
-    income_elasticity_lsr: 0
-    substitution_elasticity_lsr: 0
-    gov.simulation.labor_supply_responses.elasticities.income: 0
-    gov.simulation.labor_supply_responses.elasticities.substitution.all: 0
-  output:
-    labor_supply_behavioral_response: 0
-
 - name: Negative total earnings with elasticities off
   period: 2023
   input:
     employment_income_before_lsr: 30_000
     self_employment_income_before_lsr: -40_000  # Net negative earnings
-    gov.simulation.labor_supply_responses.elasticities.income: 0
+    gov.simulation.labor_supply_responses.elasticities.income.all: 0
     gov.simulation.labor_supply_responses.elasticities.substitution.all: 0
   output:
     labor_supply_behavioral_response: 0
@@ -35,7 +13,7 @@
   input:
     employment_income_before_lsr: 50_000
     self_employment_income_before_lsr: -10_000  # Net positive earnings = 40_000
-    gov.simulation.labor_supply_responses.elasticities.income: 0
+    gov.simulation.labor_supply_responses.elasticities.income.all: 0
     gov.simulation.labor_supply_responses.elasticities.substitution.all: 0
   output:
     labor_supply_behavioral_response: 0

policyengine_us/tests/policy/baseline/gov/simulation/labor_supply_response/substitution_elasticity.yaml

@@ -1,48 +1,23 @@
-- name: Default substitution elasticity is zero
+- name: Primary earner under 65 in decile 5 with base elasticity
   period: 2023
   input:
+    age: 50
     employment_income_before_lsr: 50_000
     self_employment_income_before_lsr: 0
     gov.simulation.labor_supply_responses.elasticities.substitution.all: 0
+    gov.simulation.labor_supply_responses.elasticities.substitution.by_position_and_decile.primary.5: 0.15
+    gov.simulation.labor_supply_responses.elasticities.substitution.age_multiplier_over_threshold: 2.0
   output:
-    substitution_elasticity: 0
+    substitution_elasticity: 0.15
 
-- name: Global substitution elasticity override
+- name: Primary earner 65+ in decile 5 with multiplier effect
   period: 2023
   input:
+    age: 70
     employment_income_before_lsr: 50_000
     self_employment_income_before_lsr: 0
-    gov.simulation.labor_supply_responses.elasticities.substitution.all: 0.25
-  output:
-    substitution_elasticity: 0.25
-
-- name: Primary earner in decile 1 with default parameters
-  period: 2023
-  input:
-    employment_income_before_lsr: 10_000
-    self_employment_income_before_lsr: 0
     gov.simulation.labor_supply_responses.elasticities.substitution.all: 0
-    gov.simulation.labor_supply_responses.elasticities.substitution.by_position_and_decile.primary.1: 0.1
-    gov.simulation.labor_supply_responses.elasticities.substitution.by_position_and_decile.secondary: 0.2
+    gov.simulation.labor_supply_responses.elasticities.substitution.by_position_and_decile.primary.5: 0.15
+    gov.simulation.labor_supply_responses.elasticities.substitution.age_multiplier_over_threshold: 2.0
   output:
-    substitution_elasticity: 0  # TODO: Debug why single person isn't getting primary earner elasticity
-
-- name: Negative total earnings should have zero elasticity
-  period: 2023
-  input:
-    employment_income_before_lsr: 50_000
-    self_employment_income_before_lsr: -60_000  # Net negative earnings
-    gov.simulation.labor_supply_responses.elasticities.substitution.all: 0
-    gov.simulation.labor_supply_responses.elasticities.substitution.by_position_and_decile.primary.1: 0.2
-  output:
-    substitution_elasticity: 0  # max_(earnings, 0) = 0, so elasticity = 0
-
-- name: Positive net earnings after self-employment loss
-  period: 2023
-  input:
-    employment_income_before_lsr: 50_000
-    self_employment_income_before_lsr: -5_000  # Net positive earnings = 45_000
-    gov.simulation.labor_supply_responses.elasticities.substitution.all: 0
-    gov.simulation.labor_supply_responses.elasticities.substitution.by_position_and_decile.primary.5: 0.15  # 45k falls in decile 5
-  output:
-    substitution_elasticity: 0.15
+    substitution_elasticity: 0.30

policyengine_us/variables/gov/simulation/labor_supply_response/income_elasticity.py

@@ -7,4 +7,30 @@ class income_elasticity(Variable):
     label = "income elasticity of labor supply"
     unit = "/1"
     definition_period = YEAR
-    adds = ["gov.simulation.labor_supply_responses.elasticities.income"]
+    reference = [
+        "https://www.cbo.gov/publication/43675",
+        "https://www.cbo.gov/publication/43676",
+        "https://academic.oup.com/restud/article-abstract/72/2/395/1558553",
+    ]
+
+    def formula(person, period, parameters):
+        p = parameters(
+            period
+        ).gov.simulation.labor_supply_responses.elasticities.income
+
+        # Check if global override is set
+        if p.all != 0:
+            return p.all
+
+        # Get base income elasticity
+        base_elasticity = p.base
+
+        # Apply age multiplier for individuals at or above age threshold
+        age = person("age", period.this_year)
+        age_multiplier = where(
+            age >= p.age_threshold,
+            p.age_multiplier_over_threshold,
+            1.0,  # No multiplier for under threshold
+        )
+
+        return base_elasticity * age_multiplier

policyengine_us/variables/gov/simulation/labor_supply_response/substitution_elasticity.py

@@ -7,12 +7,18 @@ class substitution_elasticity(Variable):
     label = "substitution elasticity of labor supply"
     unit = "/1"
     definition_period = YEAR
+    reference = [
+        "https://www.cbo.gov/publication/43675",
+        "https://www.cbo.gov/publication/43676",
+        "https://academic.oup.com/restud/article-abstract/72/2/395/1558553",
+    ]
 
     def formula(person, period, parameters):
         p = parameters(
             period
         ).gov.simulation.labor_supply_responses.elasticities.substitution
 
+        # Check for global override
         if p.all != 0:
             return p.all
 
@@ -30,6 +36,7 @@ class substitution_elasticity(Variable):
             1_726e3,
         ]
 
+        # Calculate earnings
         raw_earnings = add(
             person,
             period,
@@ -38,41 +45,59 @@ class substitution_elasticity(Variable):
                 "self_employment_income_before_lsr",
             ],
         )
+        # Use max_ to prevent negative earnings from causing issues
         earnings = max_(raw_earnings, 0)
-        earnings_decile = (
-            np.searchsorted(EARNINGS_DECILE_MARKERS, earnings) + 1
+        # Use searchsorted with side='right' to bin earnings into deciles
+        # This gives decile numbers 1-10 directly without needing to add 1
+        earnings_decile = np.searchsorted(
+            EARNINGS_DECILE_MARKERS, earnings, side="right"
         )
 
+        # Determine if primary earner (highest earner in tax unit)
         tax_unit = person.tax_unit
-        # Primary earner == highest earner in tax unit
         max_earnings_in_unit = tax_unit.max(earnings)
         is_primary_earner = earnings == max_earnings_in_unit
 
-        elasticities = np.zeros_like(earnings)
+        # Get base elasticity from position and decile
+        base_elasticity = np.zeros_like(earnings, dtype=float)
 
         # Handle zero earnings first
         zero_earnings = earnings == 0
-        elasticities[zero_earnings] = 0
+        base_elasticity[zero_earnings] = 0
 
-        # For non-zero earnings, assign elasticities
+        # For non-zero earnings, assign base elasticities
         non_zero_earnings = earnings > 0
 
         if np.any(non_zero_earnings):
-            # First assign primary earner elasticities by decile
-            decile_elasticities = [
-                p.by_position_and_decile.primary._children[str(i + 1)]
-                for i in range(10)
-            ]
-            for i in range(10):
+            # Primary earners by decile
+            for i in range(10):  # Iterate through deciles 1-10
+                decile_num = i + 1  # Decile numbers are 1-10
                 mask = (
                     non_zero_earnings
-                    & (earnings_decile == i + 1)
+                    & (earnings_decile == decile_num)
                     & is_primary_earner
                 )
-                elasticities[mask] = decile_elasticities[i]
+                if np.any(mask):
+                    # Access parameter using getattr to handle both normal and test scenarios
+                    decile_param = getattr(
+                        p.by_position_and_decile.primary, str(decile_num)
+                    )
+                    # Handle both Parameter objects and raw values (when overridden in tests)
+                    param_value = (
+                        decile_param(period)
+                        if callable(decile_param)
+                        else decile_param
+                    )
+                    base_elasticity[mask] = param_value
 
-            # Then assign secondary earner elasticity where applicable
-            secondary_mask = non_zero_earnings & ~is_primary_earner
-            elasticities[secondary_mask] = p.by_position_and_decile.secondary
+            # Secondary earners get zero elasticity (only primary earners have non-zero values)
 
-        return elasticities
+        # Apply age multiplier for individuals at or above age threshold
+        age = person("age", period.this_year)
+        age_multiplier = where(
+            age >= p.age_threshold,
+            p.age_multiplier_over_threshold,
+            1.0,  # No multiplier for under threshold
+        )
+
+        return base_elasticity * age_multiplier

{policyengine_us-1.425.7.dist-info → policyengine_us-1.426.0.dist-info}/METADATA

@@ -1,6 +1,6 @@
 Metadata-Version: 2.4
 Name: policyengine-us
-Version: 1.425.7
+Version: 1.426.0
 Summary: Add your description here.
 Author-email: PolicyEngine <hello@policyengine.org>
 License-File: LICENSE

{policyengine_us-1.425.7.dist-info → policyengine_us-1.426.0.dist-info}/RECORD

@@ -918,9 +918,15 @@ policyengine_us/parameters/gov/simulation/capital_gains_responses/elasticity.yam
 policyengine_us/parameters/gov/simulation/labor_supply_responses/bounds/README.md,sha256=o3Ma9FY6zLzF3qYli3J52cv2Dw1WGvJUp9kDuXkDx-U,9
 policyengine_us/parameters/gov/simulation/labor_supply_responses/bounds/effective_wage_rate_change.yaml,sha256=MtDdf5nH1N3-snStnkvh9JsfWlLfP0aKiTsBz23Yi7I,179
 policyengine_us/parameters/gov/simulation/labor_supply_responses/bounds/income_change.yaml,sha256=G3jBCDCS9aVPm_fIk7MroG3eeHC9R4FHFvyvFylhzXI,157
-policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/README.md,sha256=jlWjpmYXUItsM3twGtNyUkbKuAaE8O9GjWcIF0bVAlg,14
-policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/income.yaml,sha256=8368gwpFH5jRPP3JOsZTmPrOoqN1d_WWiEwuKxDTrJQ,209
-policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/substitution.yaml,sha256=q3b4i70HTPpRPbKU95QCRxL0wVxzi9_PRqDhGznd7Cs,1869
+policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/README.md,sha256=p_ZppvSIgEdLOXZGN3PagygmqYfKlwaZDUWKakceNpc,7843
+policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/income/age_multiplier_over_threshold.yaml,sha256=QpIwprtWdpjLbGp0PkSWdCJPEmPs5l-Kc7MZP3rY3Lc,769
+policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/income/age_threshold.yaml,sha256=F1-N4w7C3L_NksKdcxrYbHtD4Qc9GF9IVNJ8mxbCeJQ,644
+policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/income/all.yaml,sha256=yfIGr7j1GjiQgEfgvVW1BINWMhyDLQMzSO21Eq96imE,293
+policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/income/base.yaml,sha256=IDdYy_GyuF-6vqZ2vtMHoJfA9X0GCNuOCxVQ8N8-D24,648
+policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/substitution/age_multiplier_over_threshold.yaml,sha256=t16tyufELBFdV-UItR7BXf8BVgXVoXkdnxugJbRzaO4,802
+policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/substitution/age_threshold.yaml,sha256=F1-N4w7C3L_NksKdcxrYbHtD4Qc9GF9IVNJ8mxbCeJQ,644
+policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/substitution/all.yaml,sha256=JjAYkRUs6zcy8bPrP6HSiKqpCTxXhDFHKPrTLBW14NY,309
+policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/substitution/by_position_and_decile.yaml,sha256=e0qsuZygCDZ_EbgGydfEYOSRxwU-AOpZfoblxsXTVkQ,2070
 policyengine_us/parameters/gov/ssa/README.md,sha256=Rcxn6NYTRCJYhktw0-I4QxgcDsYYsqCKabBb7EJq4gw,39
 policyengine_us/parameters/gov/ssa/nawi.yaml,sha256=Dbb8NPv7AEmaKPhHgDsWA5D54Q2aJPkr0OSccgDR4bw,4197
 policyengine_us/parameters/gov/ssa/uprating.yaml,sha256=qR8giFlpvxYxaeOopHqy8BiGT1OQQEz2X09elmbLNl4,1447
@@ -3783,9 +3789,10 @@ policyengine_us/tests/policy/baseline/gov/local/tx/harris/in_harris_county_tx.ya
 policyengine_us/tests/policy/baseline/gov/local/tx/harris/rides/tx_harris_rides_eligible.yaml,sha256=eOBTzdhMtzwr3QAUURqqpNKgAsk7z9HXl543qD8oqUo,796
 policyengine_us/tests/policy/baseline/gov/local/tx/harris/rides/tx_harris_rides_subsidy.yaml,sha256=m4V1kGW3ID_znp8EWOLZBX_PqyWhs371OJHZCY1VZq0,852
 policyengine_us/tests/policy/baseline/gov/simulation/labor_supply_response/employment_income_behavioral_response.yaml,sha256=UyVqLHduKDRHuIE-wJS0czNGyEDmTNq2gIiVoW-kEpA,1695
-policyengine_us/tests/policy/baseline/gov/simulation/labor_supply_response/income_elasticity.yaml,sha256=_NCgAPoomWP-Hp563Ih5mBtN7VTywrXmtx0BhFO5r0c,336
-policyengine_us/tests/policy/baseline/gov/simulation/labor_supply_response/labor_supply_behavioral_response.yaml,sha256=FqBkZcYs-EFj-pNtUAtW85ZyGn_riZ3_pH-8DP90ORU,1551
-policyengine_us/tests/policy/baseline/gov/simulation/labor_supply_response/substitution_elasticity.yaml,sha256=Cfb3-vmZxtLJdDIimJsByRDqdYh1ds5lBCQVgShDDtQ,2032
+policyengine_us/tests/policy/baseline/gov/simulation/labor_supply_response/income_elasticity.yaml,sha256=JZAa-i5I9xkMgd_SPu5ifYfDAKnzYmv_B8nkvXfnhXE,747
+policyengine_us/tests/policy/baseline/gov/simulation/labor_supply_response/integration.yaml,sha256=hnRnR_mlswcCK-n7GTStDAa5bBME3nKR_VDIlIUoIx8,2385
+policyengine_us/tests/policy/baseline/gov/simulation/labor_supply_response/labor_supply_behavioral_response.yaml,sha256=5Zqh9KxGEg9u1CgIrxjFD6G-qYzZ7Ut9B9tdkwIdv5Q,799
+policyengine_us/tests/policy/baseline/gov/simulation/labor_supply_response/substitution_elasticity.yaml,sha256=LriCrDWZbyNX4g6bz__N1qesWuBgtgB_4vDbiFobIQQ,1022
 policyengine_us/tests/policy/baseline/gov/ssa/ss/never_eligible_for_social_security_benefits.yaml,sha256=-l0F8L_YCNpNfwBtZLxEfPOCPea4ZHfGNAHRw3ozkYk,587
 policyengine_us/tests/policy/baseline/gov/ssa/ssi/integration_tests.yaml,sha256=CLLMuqslIKd8niom1AL0CrhnkGlTH30rF0MOfLTA_3o,8398
 policyengine_us/tests/policy/baseline/gov/ssa/ssi/is_ssi_aged_blind_disabled.yaml,sha256=tyim2uGywNbV57pL2M6DO2kH1I2lXZS6P2Vab2zyIRA,470
@@ -6205,13 +6212,13 @@ policyengine_us/variables/gov/local/tx/harris/rides/tx_harris_rides_eligible.py,
 policyengine_us/variables/gov/local/tx/harris/rides/tx_harris_rides_subsidy.py,sha256=fuMRW0_3Lh0q-9OJi3DyY0l5dJA_4ejj1fbIEl5xLWg,875
 policyengine_us/variables/gov/simulation/capital_gains_responses.py,sha256=Sjie6qu1LQIb5Ktk4iGXuEoHxQ0soSIenameuxHdyX0,5947
 policyengine_us/variables/gov/simulation/labor_supply_response/employment_income_behavioral_response.py,sha256=_gErh7LpoOhZ-_b67cg3qtNgexecofttE4fAw0-htMg,840
-policyengine_us/variables/gov/simulation/labor_supply_response/income_elasticity.py,sha256=QIi7EX2EmvW3S2nYP_6vJ37uU9YEsM249QGhudBoQ7Q,286
+policyengine_us/variables/gov/simulation/labor_supply_response/income_elasticity.py,sha256=yVNHx5hJ0rI90J0OCyWeZ7xFWusK0Wotj-HIeZ1iPKE,1077
 policyengine_us/variables/gov/simulation/labor_supply_response/income_elasticity_lsr.py,sha256=GpHk3ZAYfsI6qXWD8iTJ_IRvaoYHg4s2gNeTl22kd2Y,732
 policyengine_us/variables/gov/simulation/labor_supply_response/labor_supply_behavioral_response.py,sha256=KpnZMqjMoS0tpDKT6TDp0ev9moxka5lisjqDxoHdOWA,2422
 policyengine_us/variables/gov/simulation/labor_supply_response/relative_income_change.py,sha256=EOCmle2VTADu0A0VXmSZk38SzVeH7oKPe-4Noyvl62c,1346
 policyengine_us/variables/gov/simulation/labor_supply_response/relative_wage_change.py,sha256=Lhn-zdGyIevS04jF3roS4101GF70N1-FPpNeKimW2iU,1361
 policyengine_us/variables/gov/simulation/labor_supply_response/self_employment_income_behavioral_response.py,sha256=zdJjfUOVbVRQEtcHVIssvxkS5D3BZlnn6GxI9AIA_mQ,352
-policyengine_us/variables/gov/simulation/labor_supply_response/substitution_elasticity.py,sha256=2_Wo5XPqMiC4LnSfbcSVj-P2QWUCCcGBd8r95c0Afjw,2282
+policyengine_us/variables/gov/simulation/labor_supply_response/substitution_elasticity.py,sha256=eet1LtMM0h0E1cwLtNifajVA7NdKIz-LIr7YKs7GFHs,3528
 policyengine_us/variables/gov/simulation/labor_supply_response/substitution_elasticity_lsr.py,sha256=TH5bDW97u1N5pIr82eVve5DDt7A10kg5zAipjodFbd0,768
 policyengine_us/variables/gov/ssa/ss/never_eligible_for_social_security_benefits.py,sha256=Yc8a0ySF-Ddijb5CMJBNklqUSW4VQH7d5mNSJClo_6c,547
 policyengine_us/variables/gov/ssa/ss/social_security.py,sha256=J5zzCleYk_K5eMCtrlvzAlOXyLwJESqzcnF7w4ubiKU,438
@@ -8842,8 +8849,8 @@ policyengine_us/variables/input/farm_income.py,sha256=BEKxYmHNNnWJAAvULl5qZJigy5
 policyengine_us/variables/input/geography.py,sha256=Ux0ueAf0rhZaflyEqz81UuXP3xKCKBDvoO3CrKhiQEc,5421
 policyengine_us/variables/input/self_employment_income.py,sha256=PwsGz8R4lRikKWUYOhsC0qosNNLXq4f5SQmfw4S3mk8,511
 policyengine_us/variables/input/self_employment_income_before_lsr.py,sha256=E8fcX9Nlyqz8dziHhQv_euutdmoIwFMMWePUwbbwv_w,379
-policyengine_us-1.425.7.dist-info/METADATA,sha256=p_6Q5nKK9ePnzkpu12ajcKSPNfdOfYUl3bVpZS7f7rQ,1649
-policyengine_us-1.425.7.dist-info/WHEEL,sha256=qtCwoSJWgHk21S1Kb4ihdzI2rlJ1ZKaIurTj_ngOhyQ,87
-policyengine_us-1.425.7.dist-info/entry_points.txt,sha256=MLaqNyNTbReALyKNkde85VkuFFpdPWAcy8VRG1mjczc,57
-policyengine_us-1.425.7.dist-info/licenses/LICENSE,sha256=2N5ReRelkdqkR9a-KP-y-shmcD5P62XoYiG-miLTAzo,34519
-policyengine_us-1.425.7.dist-info/RECORD,,
+policyengine_us-1.426.0.dist-info/METADATA,sha256=LhSAqmdjP1G85s5SDW_9soTRZWl4bmaNSk0NBeTFS7k,1649
+policyengine_us-1.426.0.dist-info/WHEEL,sha256=qtCwoSJWgHk21S1Kb4ihdzI2rlJ1ZKaIurTj_ngOhyQ,87
+policyengine_us-1.426.0.dist-info/entry_points.txt,sha256=MLaqNyNTbReALyKNkde85VkuFFpdPWAcy8VRG1mjczc,57
+policyengine_us-1.426.0.dist-info/licenses/LICENSE,sha256=2N5ReRelkdqkR9a-KP-y-shmcD5P62XoYiG-miLTAzo,34519
+policyengine_us-1.426.0.dist-info/RECORD,,

policyengine_us/parameters/gov/simulation/labor_supply_responses/elasticities/substitution.yaml

@@ -1,70 +0,0 @@
-all:
-  description: Percent change (of the change in the effective marginal wage) in labor supply given a 1% change in the effective marginal wage. This parameter overrides all other substitution elasticities if provided.
-  values:
-    2020-01-01: 0
-  metadata:
-    unit: /1
-    label: substitution elasticity of labor supply
-by_position_and_decile:
-  metadata:
-    label: by position and decile
-    unit: /1
-    propagate_metadata_to_children: true
-  primary:
-    metadata:
-      label: primary adult
-    1:
-      metadata:
-        label: primary adult, 1st decile substitution elasticity
-      values:
-        2020-01-01: 0
-    2:
-      metadata:
-        label: primary adult, 2nd decile substitution elasticity
-      values:
-        2020-01-01: 0
-    3:
-      metadata:
-        label: primary adult, 3rd decile substitution elasticity
-      values:
-        2020-01-01: 0
-    4:
-      metadata:
-        label: primary adult, 4th decile substitution elasticity
-      values:
-        2020-01-01: 0
-    5:
-      metadata:
-        label: primary adult, 5th decile substitution elasticity
-      values:
-        2020-01-01: 0
-    6:
-      metadata:
-        label: primary adult, 6th decile substitution elasticity
-      values:
-        2020-01-01: 0
-    7:
-      metadata:
-        label: primary adult, 7th decile substitution elasticity
-      values:
-        2020-01-01: 0
-    8:
-      metadata:
-        label: primary adult, 8th decile substitution elasticity
-      values:
-        2020-01-01: 0
-    9:
-      metadata:
-        label: primary adult, 9th decile substitution elasticity
-      values:
-        2020-01-01: 0
-    10:
-      metadata:
-        label: primary adult, 10th decile substitution elasticity
-      values:
-        2020-01-01: 0
-  secondary:
-    metadata:
-      label: secondary adult, all deciles substitution elasticity
-    values:
-      2020-01-01: 0