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Job Characteristics and Labour Supply

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  • Lars Kunze
  • Nicolai Suppa

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Abstract

We document the importance of non-pecuniary aspects in employment relationships by showing that labour supply elasticities differ significantly among individuals’ job characteristics. Factor analysis indicates the relevance of four characteristics: autonomy, workload, variety and job security. Using a discrete choice model of family labour supply on the basis of Australian data, we show that income elasticities are significantly higher among individuals with “good” characteristics (e.g. a securer job) whereas wage elasticities are significantly lower. This result holds for both men and women. Our main hypothesis are derived within the ‘new approach to consumer theory proposed by Lancaster.

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Bibliographic Info

Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0418.

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Length: 42 pages
Date of creation: Jun 2013
Date of revision:
Handle: RePEc:rwi:repape:0418

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Keywords: Labour supply; Discrete choice model; Job characteristics;

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References

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  1. Farzin, Y.H., 2009. "The effect of non-pecuniary motivations on labor supply," The Quarterly Review of Economics and Finance, Elsevier, vol. 49(4), pages 1236-1259, November.
  2. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132.
  3. Hendler, Reuven, 1975. "Lancaster's New Approach to Consumer Demand and Its Limitations," American Economic Review, American Economic Association, vol. 65(1), pages 194-99, March.
  4. Hilary Hoynes, 1993. "Welfare Transfers in Two-Parent Families: Labor Supply and Welfare Participation Under AFDC-UP," NBER Working Papers 4407, National Bureau of Economic Research, Inc.
  5. Peter Haan, 2006. "Much ado about nothing: conditional logit vs. random coefficient models for estimating labour supply elasticities," Applied Economics Letters, Taylor & Francis Journals, vol. 13(4), pages 251-256.
  6. Richard Blundell & André Chiappori & Thierry Magnac & Costas Meghir, 1998. "Collective labour supply: heterogeneity and non-participation," IFS Working Papers W98/20, Institute for Fiscal Studies.
  7. Arthur van Soest, 1995. "Structural Models of Family Labor Supply: A Discrete Choice Approach," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 63-88.
  8. Fortin, Bernard & Lacroix, Guy, 1997. "A Test of the Unitary and Collective Models of Household Labour Supply," Economic Journal, Royal Economic Society, vol. 107(443), pages 933-55, July.
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  10. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
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  12. Apps, Patricia & Kabátek, Jan & Rees, Ray & van Soest, Arthur, 2012. "Labor Supply Heterogeneity and Demand for Child Care of Mothers with Young Children," IZA Discussion Papers 7007, Institute for the Study of Labor (IZA).
  13. Aldo Rustichini & Paolo Siconolfi, 2008. "Preferences over characteristics and utility functions over commodities," Economic Theory, Springer, vol. 36(1), pages 159-164, July.
  14. Pierre Cahuc & André Zylberberg, 2004. "Labor Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 026203316x, December.
  15. Atrostic, B K, 1982. "The Demand for Leisure and Nonpecuniary Job Characteristics," American Economic Review, American Economic Association, vol. 72(3), pages 428-40, June.
  16. Viscusi, W Kip, 1978. "Wealth Effects and Earnings Premiums for Job Hazards," The Review of Economics and Statistics, MIT Press, vol. 60(3), pages 408-16, August.
  17. Thomas Cornelißen, 2009. "The Interaction of Job Satisfaction, Job Search, and Job Changes. An Empirical Investigation with German Panel Data," Journal of Happiness Studies, Springer, vol. 10(3), pages 367-384, June.
  18. Daniele Pacifico, 2013. "On the role of unobserved preference heterogeneity in discrete choice models of labour supply," Empirical Economics, Springer, vol. 45(2), pages 929-963, October.
  19. Clark, Andrew E., 2001. "What really matters in a job? Hedonic measurement using quit data," Labour Economics, Elsevier, vol. 8(2), pages 223-242, May.
  20. Euwals, Rob & van Soest, Arthur, 1999. "Desired and actual labour supply of unmarried men and women in the Netherlands," Labour Economics, Elsevier, vol. 6(1), pages 95-118, March.
  21. Wells, Robert, 2010. "An examination of the utility bearing characteristics of occupations: A factor analytical approach," Economics Letters, Elsevier, vol. 108(3), pages 296-298, September.
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Cited by:
  1. repec:ese:iserwp:2013-16 is not listed on IDEAS
  2. Nicolai Suppa, 2012. "Job Characteristics and Subjective Well-Being in Australia – A Capability Approach Perspective," Ruhr Economic Papers 0388, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

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