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Are labor supply decisions consistent with neoclassical preferences? Evidence from Indian boat owners

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  • Giné, Xavier
  • Martinez-Bravo, Monica
  • Vidal-Fernández, Marian

Abstract

This paper studies the labor supply of South Indian boat owners using daily labor participation decisions of 247 boat owners during seven years. We test the standard neoclassical model of labor supply and find that boat owners’ labor participation depends positively on expected earnings but also on recent accumulated earnings, albeit weakly. Participation elasticities with respect to expected earnings range between 0.8 and 1.3 and about −0.05 and −0.01 with respect to changes in recent income. While recent earnings affecting participation is at odds with the standard neoclassical model, the magnitude of the effect is small, suggesting that the neoclassical model is a good approximation of the labor supply behavior of boat owners in southern India.

Suggested Citation

  • Giné, Xavier & Martinez-Bravo, Monica & Vidal-Fernández, Marian, 2017. "Are labor supply decisions consistent with neoclassical preferences? Evidence from Indian boat owners," Journal of Economic Behavior & Organization, Elsevier, vol. 142(C), pages 331-347.
  • Handle: RePEc:eee:jeborg:v:142:y:2017:i:c:p:331-347
    DOI: 10.1016/j.jebo.2017.07.014
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    Cited by:

    1. Isabel Z. Martinez & Emmanuel Saez & Michael Siegenthaler, 2018. "Intertemporal Labor Supply Substitution? Evidence from the Swiss Income Tax Holidays," NBER Working Papers 24634, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Intertemporal labor supply; Daily income; Fishing behavior; Small-scale fisheries;

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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