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The immaterial sustenance of work and leisure: A new look at the work–leisure model

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  • Sherman, Arie
  • Shavit, Tal
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    Abstract

    We introduce a model of labor supply that considers the immaterial sustenance value of work per se. We suggest that people ask for compensation when increasing work hours but also when reducing work hours even when continuing to work part-time. Based on survey results, we show that the reference point (the worker's actual position) is important, and has an effect on the requested compensation when increasing or decreasing the number of hours worked. We find that the requested compensation is neither linear and nor symmetrical, and suggest that welfare policy should take the immaterial sustenance into account.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics).

    Volume (Year): 46 (2013)
    Issue (Month): C ()
    Pages: 10-16

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    Handle: RePEc:eee:soceco:v:46:y:2013:i:c:p:10-16

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    Web page: http://www.elsevier.com/locate/inca/620175

    Related research

    Keywords: Leisure; Loss aversion; Reference point; Relative compensation; Work;

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    References

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    7. Robert Moffitt, 2002. "Welfare Programs and Labor Supply," NBER Working Papers 9168, National Bureau of Economic Research, Inc.
    8. Tversky, Amos & Kahneman, Daniel, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, MIT Press, vol. 106(4), pages 1039-61, November.
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