Labour Supply,Life Satisfaction,and the (Dis)Utility of Work*

In economic theory, it is typically assumed that there is a “disutility of labour”. However, empirical research on subjective well‐being has consistently shown that unemployed people are less happy than employed people, even after taking income differences into account. In this paper, we attempt to reconcile both findings. We show that happiness and work hours exhibit an inverse U‐shaped relation – working longer raises the level of happiness, as long as the total working time is not too long. Hence, working can be beneficial for happiness and, at the same time, it can exert a disutility at the margin.     

Differences in Work Hours and Hours Preferences by Race in the U.S.

Significant differences exist in actual and preferred work hours by race. Specifically, black males work 20 percent fewer annual hours than white males. The differences between black and white women are small. Black workers are significantly more likely than white workers to prefer additional work and fewer are satisfied with their current hours of work. I use the hours-inequality hypothesis of Bell and Freeman (1995,1997) to evaluate the extent to which race differences in work hours and hours preferences are related to race differences in incentives. I demonstrate that whereas white workers work longer hours in response to overall wage variation in their relevant labor market cell, black workers react to the wage variation among black workers but not to the variation overall. The fact that labor market incentives are different for otherwise similar black and white workers is difficult to reconcile with standard competitive theory.     

Extending working hours: why not work 42 h rather than 38?—a CGE analysis for Germany

Faced with a record level of unemployment, the present debate in Germany is to extend the weekly hours of work. In this paper the employment effects of an economy-wide increase in weekly hours are quantified on the basis of a computable general equilibrium model for different specifications of the wage setting rule and the use of additional policy-induced public income. The simulation results back the argument of the opponents of longer working time that not more jobs will be created. However, when the higher tax revenues from GDP growth are used to reduce social security contributions, then the claim of the proponents that more jobs will be created can be supported.     

Working Hours and Sustainable Development

Many works on sustainable development stress the part played by reduced working hours in the promotion of a model for alternative development. The direct link between working hours and the environment, however, still deserves to be supported. This is the issue we would like to discuss through an analysis of the relationships between consumption and working hours. We use surveys on French household expenses to highlight the environmental consequences of long hours: they encourage goods and energy-intensive consumptions and favour conspicuous expenditure and non-sustainable lifestyles.     

Does greater income inequality cause increased work hours? New evidence from high income economies

We explore the extent to which individual's allocation of time between labour and leisure is affected by the consumption standards of the rich. Utilizing a panel data methodology and panel Granger causality tests we investigate the relationship between income inequality and work hours for a cluster of 24 high-income OECD countries over the period 1990–2015. Four alternative measures of income inequality are considered. We find that greater income inequality is associated with longer work hours indicating stronger concern for conspicuous consumption rather than conspicuous leisure. Even though the resulting estimates lend support to the theoretical framework on consumption emulation, the generated evidence also appears to be in line with a Duesenberry's and Frank's expenditure cascading approach. The ambiguity however arising from the Granger Causality tests appears to lead – to a certain extent – to different conclusions about the direction of causality or whether a causal relationship does even exist. It is therefore imperative that caution should be exercised when interpreting the direction of the causal dimension.     

Why economists dislike a lump of labor

The lump-of-labor fallacy has been called one of the “best known fallacies in economics.” It is widely cited in disparagement of policies for reducing the standard hours of work, yet the authenticity of the fallacy claim is questionable, and explanations of it are inconsistent and contradictory. This article discusses recent occurrences of the fallacy claim and investigates anomalies in the claim and its history. S.J. Chapman's coherent and formerly highly regarded theory of the hours of labor is reviewed, and it is shown how that theory could lend credence to the job-creating potentiality of shorter working time policies. It concludes that substituting a dubious fallacy claim for an authentic economic theory may have obstructed fruitful dialogue about working time and the appropriate policies for regulating it.     

谁增加了劳动时间供给？——来自CHNS的证据

文章利用微观经济理论推导出低收入者在追求效用最大化和满足最低生存必需支出的约束条件下,低工资率时劳动供给曲线将向右下方倾斜。在此基础上,利用CHNS（2006）数据对其劳动供给时间进行了实证分析并进行解释,找出了工资率下降时增加劳动供给时间的劳动者个体特征。     

FEATURES OF THE HIDDEN ECONOMY IN THE NETHERLANDS

This paper presents survey results on the size and structure of the hidden labour market in The Netherlands. According to the results total income from hidden work is at least 1 percent of national income. The hidden income is shared by more than one million participants (nearly 12 percent of the corresponding population). This result is lower than various other estimates of the magnitude of the hidden economy. Some definitional and methodological issues are discussed in order to explain the difference from the other estimates.
The most notable results of the survey refer to the structure of the hidden labour market. At one end of this market are people with a high wage rate, working relatively few hours. They have the characteristics which given them a favourable position in the formal labour market. At the other end are people with low hidden wages, who work more hours. They have difficulty in finding a formal job. The income from hidden labour is distributed in very much the same way as income from formal activities. There is no evidence that the hidden labour market compensates those who are worse off in the formal economy.     

Employment and hours of work

This paper develops a dynamic model of the labor market in which the degree of substitution between employment and hours of work is determined as part of a search equilibrium. Each firm chooses its demand for working hours and number of vacancies, and the earnings profile is determined by Nash bargaining. The earnings profile is generally nonlinear in hours of work, and defines the trade-off between employment and hours of work. Concave production technology induces firms to overemploy and, as a result, hours of work are below their optimal level. The Hosios condition is not sufficient for efficiency. When there are two industries, workers employed by firms with higher recruitment costs work longer and earn more. That is, “good jobs” require longer hours of work. Interestingly, technology differentials cannot account for working hours differentials.     

The Causal Effects of the Minimum Wage Introduction in Germany – An Overview

In 2015, Germany introduced a statutory hourly minimum wage that was not only universally binding but also set at a relatively high level. We discuss the short‐run effects of this new minimum wage on a wide set of socioeconomic outcomes, such as employment and working hours, earnings and wage inequality, dependent and self‐employment, as well as reservation wages and satisfaction. We also discuss difficulties in the implementation of the minimum wage and the measurement of its effects related to non‐compliance and suitability of data sources. Two years after the minimum wage introduction, the following conclusions can be drawn: while hourly wages increased for low‐wage earners, some small negative employment effects are also identifiable. The effects on aspired goals, such as poverty and inequality reduction, have not materialised in the short run. Instead, a tendency to reduce working hours is found, which alleviates the desired positive impact on monthly income. Additionally, the level of non‐compliance was substantial in the short run, thus drawing attention to problems when implementing such a wide reaching policy.     

New estimates of labour supply elasticities for married women in Canada 1996–2005

In this article, we estimate income and substitution labour supply and participation elasticities for Canadian married women using data from the Survey of Labour and Income Dynamics 1996–2005. We use the Canadian Tax and Credit Simulator (CTaCS) and detailed information on the structure of income at the household level to compute the marginal tax rates faced by each individual. We then use these marginal tax rates to compute net own-wage, spouse-wage, and nonlabour income. We show how the magnitude of the estimated elasticities varies depending on whether net or gross wages and income are used in the estimation procedure, and quantify biases caused by using average tax rates instead of marginal tax rates. Finally, because marginal tax rates vary significantly over the sample, we use quantile regressions to compare elasticities at different points of the hours distribution. Overall, our results show that public policies now have, on average, less scope for influencing hours of work than 10 years ago. However, the quantile results show that wives working fewer hours per week are more sensitive to changes in their own or spouses’ wages.     

Hours worked in selected OECD countries: an empirical assessment

In this paper, we empirically assess the evolution of the aggregate hours worked, with a particular emphasis on their age structure, in a sample of OECD countries, along the period 1970–2007. We show that the age composition of the workforce has a large and statistically significant effect on hours worked volatility. To exploit the multilevel structure of our data, we use a Mixed Linear Model to investigate the consequences of (i) demographic change, (ii) sector-specific, and (iii) country-specific factors on hours worked by ‘young’ (aged 15–29) and ‘prime-aged’ (29+) individuals. We show that changes in workforce demographics, captured by the ratio between population older than 29 and population younger than 29, are strongly and significantly correlated with the amount of hours worked by ‘young’ individuals. We also document the impact of sectoral capital intensity and profitability on the dynamics of (aggregate) hours worked. Finally, we show that productive public expenditure, here proxied by the public investment in ICT, is beneficial for the hours worked both by young and prime-aged individuals.     

Chasing the carrot – actual working hours of fixed-term employees

Fixed-term contracts can serve as a screening device to reveal the true ability of workers. To achieve promotion to a permanent position, fixed-term employees have an incentive to prove themselves by providing higher effort than competing co-workers by means of longer working hours. Applying fixed effects estimation to the German register data, we find that employees work longer hours on fixed-term contracts. This effect is stronger for labour market entrants and employees that are newly hired. We further show that actual hours of work are particularly large when there is competition among co-workers to receive promotion to a permanent position.     

Work Hours and CO2 Emissions: Evidence from U.S. Households

The degrowth movement proposes worktime reduction policies to help high-income countries meet their climate goals while supporting full employment. However, the work hours elasticity of carbon emissions remains uncertain despite a growing number of empirical analyses. This paper estimates the impact of work hours on emissions using household data from the United States. We calculate the carbon intensity of goods using input-output tables from the Bureau of Economic Analysis, which we combine with spending data from the Bureau of Labor Statistics to estimate carbon footprints for a representative sample of U.S. households. There is strong evidence that households with longer work hours emit more CO₂, but our household-level estimate of the work hours elasticity of carbon emissions is lower than most country-level estimates. Our results suggest that differences in work hours account for a small fraction of differences in per capita carbon footprints across high-income countries.

Highlights

• Households with longer work hours have significantly larger carbon footprints.

• Our estimated household-level work hours elasticity is smaller than most country-level estimates.

• Work hour reduction policies likely generate modest reductions in carbon emissions.

     

Asymmetric labor supply

The estimation of labor supply elasticities has been an important issue in the economic literature. Yet all works have estimated conditional mean labor supply functions only. The objective of this paper is to obtain more information on labor supply, estimating a conditional quantile labor supply function. We use a sample of prime age urban males employees in Brazil. Two stage estimators are used as the net wage and nonlabor income are found to be endogenous to the model. Contrary to previous works using conditional mean estimators, it is found that labor supply elasticities vary significantly and asymmetrically across hours of work. While the income and wage elasticities at the standard work week are zero, for those working longer hours the elasticities are negative.     

Long‐Term Impact of Minimum Wages on Workers’ Careers: Evidence from Two Decades of Longitudinal Linked Employer–Employee Data

We analyze the impact of high youth minimum wages, relying on two decades of linked employer–employee data and a major law change. Alternative treatment/control groups follow from two strands of the literature, one tracking low‐skilled workers employed before the law change, who are eligible for a large wage increase, and one tracking the employment of full cohorts, whether working or in school when the law changed. High minimum wages led to a short‐term wage gain, which faded over time. They did not jeopardize employment prospects. Changes in the hours worked by part‐time workers point to increased job attachment.     

The labor-force participation of married women in the Soviet Union: a household cross-section analysis

Approximately 80% of women in the Soviet Union ages 15-54 years are employed outside the home. To identify the impact of demographic and economic variables on the high rate of labor force participation among Soviet women, data from an income survey of 1016 2-parent families of emigrants to Israel were analyzed. It was hypothesized that differences in participation rates among Soviet women correspond to differences in other sources of family income, wage rates and market conditions, level of education, and family household conditions, with response to changes in economic variables mediated by the role played by persuasion and social pressure in encouraging women to participate. Overall, 89.3% of the women in the sample were labor force participants. Nonparticipants were, as expected, from families with higher levels of other income. The personal qualifications of nonworking wives were considerably lower than those of working wives, with nonworking wives averaging 9.4 years of schooling compared with 13.2 years for working wives. Offered wages for working wives averaged 69 kopecks/hour in contrast to 40-50 kopecks/hour for nonworking women. A maximum-likelihood functional estimation of participation rates whoed significant coefficients for family income (negative), expected wages and education (positive), and residence in a large city (positive). The coefficients for residence in a medium-sized city, existence of a private plot, presence of nonworking men in the household, occupational status of the husband, and total number of children were insignificant. The supply of hours of work was backward-bending. The results suggest that Soviet women reach the decision to participate in the labor force through consideration of the same factors as their counterparts in nonsocialist countries. The analysis further indicates that, at present levels of fertility and exogenous conditions, the participation rate in the Soviet Union will not decrease. However, policies designed to raise the fertility level, including better facilities for children and more support for women who leave the labor force to raise young children, could ease labor force participation among soviet women.     

Eldercare hours,work hours and perceived filial obligations

ABSTRACT

In this paper, we take a fresh look at the magnitude of the trade-off between caring informally for a parent and paid work. We adopt a simultaneous approach with a primary focus on how hours of care are influenced by hours of work rather than the other way round. We also investigate the role that filial obligations play in choices of caring versus working. Using the SHARE data (2004 and 2006) we find that the elasticity of informal care hours in response to working hours is between ?0.17 in the caregivers sample and ?0.19 in the women-only caregivers sample; small but not negligible. Moreover, we find that a 10%increase in the index measuring the strength of filial obligations increases weekly hours of care by about two and a half hours.     

The efficient side of progressive income taxation

This paper examines allocative properties of progressive income taxation when individuals care about their relative income. It shows that introducing a progressive income tax can yield a Pareto improvement if pre-tax income is evenly distributed. Implementing undistorted choices of working hours requires a progressive tax schedule, and the optimal degree of progressivity decreases with pre-tax income inequality.     

NEW ESTIMATES OF HOURS OF WORK AND REAL INCOME IN CANADA FROM THE 1880s TO 1930: LONG-RUN TRENDS AND WORKERS' PREFERENCES

The first set of hours of work estimates constructed for Canada and its regions for the 1880–1930 period is presented in this article. These estimates suggest a trend decline in hours of work, especially following First World War. In addition, these estimates suggest that the decline in hours of work came at no or little cost in terms of real weekly income. The trends uncovered for Canada are found to be similar to those revealed for the U.S. In effect, by the early twentieth century workers were realizing their long expressed preferences for a shorter workweek at no loss in real income.