Final answer:
To study the impact of income guarantees on labor supply, examining changes in income guarantee policies would be most effective. This approach considers the stable short-term labor supply curve and assumes all other factors remain constant. It also accounts for the diverse responses of full-time, part-time, and younger workers to wage changes.
Step-by-step explanation:
To identify the effect of income guarantees on labor supply, it's useful to have a source of time series variation. Neither a static income guarantee (no change over time) nor a demographic trend unrelated to labor supply (such as a decrease in child-bearing) would be effective. Instead, changes in the income guarantee policy itself would provide the most direct source of variation to study the desired effect.
Taking into account that in the short run the labor supply curve does not shift much due to the quantity of hours an average person is willing to work remains fairly stable, and assuming ceteris paribus (all other factors being equal), the focus should be directly on variations in the income guarantee. This approach avoids conflating the effects with unrelated changes, such as shifts in demographics or labor market institutions.
Considering the different labor responses, such as the inelasticity of full-time workers' labor supply versus the flexibility of part-time and younger workers, it is pivotal to track changes specifically in the income guarantee to discern its true impact on various groups within the labor market.