Hours of Individual Labor Supply Models: Adding Breadth
LONNIE GOLDEN
MORRIS ALTMAN
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2007
Abstract:
What causes individuals' hours of work to climb, recede, or shift in timing? The main purpose of this article is to broaden the labor supply function to include determinants other than the conventional list of wage rate, nonwage income and preferences. Then it peers further into the black box of preferences by specifying the behavioral and social forces that both influence preference formation and lead preferences to adapt over time. Initial insights are gleaned from applying behavioral economic perspectives regarding the root sources of the process that determines how many hours and which hours someone is working or working too much? The purpose is to expand the conventional economic model of hours of labor by incorporating the various behavioral and social sources of constraints, preferences, and preference adaptation. Specifically, a model of labor hours should entail how preferences may be adaptable under social influences and how inflexibility in the workplace may often prevent individuals from getting their desired timing of work and/or a reduced number of hours. The extent of such inflexibilities puts at risk the long-term sustainability of labor as a productive resource.
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