# Calculation of the elasticity of labour offer

Hello

Im working with a very basic RBC model in my Advance Macro class. It s a typical problem of a social planner choosing consumption levels and hours of work for identical houses, a cobb douglas production function with a TFP shock, and a government expenditure shock.
The assingment is to calculate the elasticity of the labour offer with different forms of utility functions in terms of the log-linealized aproximation of the steady state. I have a specific calibration of some of the parameters, and some free parameters to be calculate. I know how to get the FCO of the level of consumption and of the hours of work, but from that point on, I dont know how to calculate the elasiticity.
Any comment or example will be more than welcomed!
Thank you

You need to be more precise. The elasticity of what with respect to what? If you are talking about the Frisch elasticity, see Domeij/Floden (2006) - The labor-supply elasticity and borrowing constraints

Elasticity is a means of measuring responsiveness. Look out the relative change in employment level for a relative change in the wage:

Elasticity of Labor Demand = % change in employment / % change in wage

If the wage goes up, employment will go down (all else constant.) If the wage goes down, employment will go up (all else constant.)