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Labor Supply and the Value of Non-work Time: Experimental Estimates from the Field

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  • Alexandre Mas
  • Amanda Pallais

Abstract

We estimate the marginal value of non-work time (MVT) using a field experiment. We offered job applicants randomized wage-hour bundles. Choices over these bundles yield estimates of the MVT as a function of hours, tracing out a labor supply relationship. The substitution effect is positive. Individual labor supply is highly elastic at low hours and more inelastic at higher hours. For unemployed applicants, our preferred estimate of the average opportunity cost of a full-time job due to lost leisure and household production is 60 percent of after-tax marginal product, and 72 percent when including fixed costs of employment and child-care costs.

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  • Alexandre Mas & Amanda Pallais, 2019. "Labor Supply and the Value of Non-work Time: Experimental Estimates from the Field," American Economic Review: Insights, American Economic Association, vol. 1(1), pages 111-126, June.
    • Handle: RePEc:aea:aerins:v:1:y:2019:i:1:p:111-26
    Note: DOI: 10.1257/aeri.20180070
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    2. Niklas Engbom, 2019. "Application Cycles," 2019 Meeting Papers 1170, Society for Economic Dynamics.
    3. Ariel Goldszmidt & John A. List & Robert D. Metcalfe & Ian Muir & V. Kerry Smith & Jenny Wang, 2020. "The Value of Time in the United States: Estimates from Nationwide Natural Field Experiments," NBER Working Papers 28208, National Bureau of Economic Research, Inc.
    4. Morchio, Iacopo & Moser, Christian, 2018. "The Gender Pay Gap: Micro Sources and Macro Consequences," MPRA Paper 99276, University Library of Munich, Germany, revised 24 Mar 2020.
    5. Adams-Prassl, Abi & Boneva, Teodora & Golin, Marta & Rauh, Christopher, 2022. "Work that can be done from home: evidence on variation within and across occupations and industries," Labour Economics, Elsevier, vol. 74(C).
    6. Han, Jeehoon & Meyer, Bruce D. & Sullivan, James X., 2020. "Inequality in the joint distribution of consumption and time use," Journal of Public Economics, Elsevier, vol. 191(C).
    7. R. Jason Faberman & Andreas I. Mueller & Ayşegül Şahin & Giorgio Topa, 2022. "Job Search Behavior Among the Employed and Non‐Employed," Econometrica, Econometric Society, vol. 90(4), pages 1743-1779, July.
    8. Schmid, Basil & Molloy, Joseph & Peer, Stefanie & Jokubauskaite, Simona & Aschauer, Florian & Hössinger, Reinhard & Gerike, Regine & Jara-Diaz, Sergio R. & Axhausen, Kay W., 2021. "The value of travel time savings and the value of leisure in Zurich: Estimation, decomposition and policy implications," Transportation Research Part A: Policy and Practice, Elsevier, vol. 150(C), pages 186-215.
    9. Daniel Agness & Travis Baseler & Sylvain Chassang & Pascaline Dupas & Erik Snowberg, 2022. "Valuing the Time of the Self-Employed," Working Papers 2022-2, Princeton University. Economics Department..
    10. Bütikofer, Aline & Karadakic, René & Willén, Alexander, 2023. "Parenthood and the Gender Gap in Commuting," Discussion Paper Series in Economics 11/2023, Norwegian School of Economics, Department of Economics.
    11. Alisa Tazhitdinova, 2022. "Increasing Hours Worked: Moonlighting Responses to a Large Tax Reform," American Economic Journal: Economic Policy, American Economic Association, vol. 14(1), pages 473-500, February.
    12. Girum Abebe & A. Stefano Caria & Esteban Ortiz-Ospina, 2021. "The Selection of Talent: Experimental and Structural Evidence from Ethiopia," American Economic Review, American Economic Association, vol. 111(6), pages 1757-1806, June.
    13. Lindgren, Petter Y. & Presterud, Ane Ofstad, 2021. "Expanding the Norwegian Armed Forces in the Time of Corona: Benefit-Cost Analysis in the Context of High Unemployment Rate," MPRA Paper 106405, University Library of Munich, Germany.
    14. Hadavand, Aboozar & Hamermesh, Daniel S. & Wilson, Wesley W., 2019. "Is Scholarly Refereeing Productive (at the Margin)?," IZA Discussion Papers 12866, Institute of Labor Economics (IZA).
    15. Tazhitdinova, Alisa, 2020. "Do only tax incentives matter? Labor supply and demand responses to an unusually large and salient tax break," Journal of Public Economics, Elsevier, vol. 184(C).
    16. Joshua D. Angrist & Sydnee Caldwell & Jonathan V. Hall, 2017. "Uber vs. Taxi: A Driver’s Eye View," NBER Working Papers 23891, National Bureau of Economic Research, Inc.
    17. Alexandre Mas & Amanda Pallais, 2020. "Alternative Work Arrangements," Annual Review of Economics, Annual Reviews, vol. 12(1), pages 631-658, August.
    18. Nicole Maestas & Kathleen J. Mullen & David Powell & Till von Wachter & Jeffrey B. Wenger, 2023. "The Value of Working Conditions in the United States and the Implications for the Structure of Wages," American Economic Review, American Economic Association, vol. 113(7), pages 2007-2047, July.
    19. Timothy J. Bartik, 2021. "How Long-Run Effects of Local Demand Shocks on Employment Rates Vary with Local Labor Market Distress," Upjohn Working Papers 21-339, W.E. Upjohn Institute for Employment Research.
    20. Germain, Antoine, 2023. "Basic income versus fairness: redistribution with inactive agents," LIDAM Discussion Papers CORE 2023022, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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