IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

The effect of non-pecuniary motivations on labor supply

  • Farzin, Y.H.

People value work not only as a means of earning income to satisfy their consumption needs but also as a direct source of satisfaction for its socio-psychological effects (non-pecuniary benefits). I show that once non-pecuniary effects of working time are incorporated in the standard labor-supply model: (i) the wage rate under-estimates (over-estimates) the true opportunity cost of non-work/leisure time when working time has non-pecuniary benefits (costs), (ii) non-pecuniary work motivations can substitute for monetary wages as work incentives, (iii) at very low wage rates, work can become a net source of utility, and (iv) the implied shape of labor-supply curve differs starkly from those implied by standard theory. I identify conditions under which a greater non-pecuniary work motivation induces a larger supply of labor, and examine the effects of non-wage income on supplies of paid work and voluntary work when there are non-pecuniary benefits associated with both types of work.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/B6W5X-4X6MT1V-1/2/11dc6350a445afef1be5e55605c03111
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal The Quarterly Review of Economics and Finance.

Volume (Year): 49 (2009)
Issue (Month): 4 (November)
Pages: 1236-1259

as
in new window

Handle: RePEc:eee:quaeco:v:49:y:2009:i:4:p:1236-1259
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620167

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Robert J. MacCulloch & Rafael Di Tella & Andrew J. Oswald, 2001. "Preferences over Inflation and Unemployment: Evidence from Surveys of Happiness," American Economic Review, American Economic Association, vol. 91(1), pages 335-341, March.
  2. 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.
  3. Agerbo, E. & Eriksson, T. & Mortensen, P.B. & Westergard-Nielsen, N., 1998. "Unemployment and Mental Disorder - An Empirical Analysis," Papers 98-02, Centre for Labour Market and Social Research, Danmark-.
  4. Camerer, Colin, et al, 1997. "Labor Supply of New York City Cabdrivers: One Day at a Time," The Quarterly Journal of Economics, MIT Press, vol. 112(2), pages 407-41, May.
  5. Rafael Di Tella & Robert J. MacCulloch & Andrew J. Oswald, 2003. "The Macroeconomics of Happiness," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 809-827, November.
  6. Dagsvik, John K. & Strøm, Steinar, 2004. "Sectoral labor supply, choice restrictions and functional form," Memorandum 13/2004, Oslo University, Department of Economics.
  7. Anthony Heyes, 2003. "The Economics of Vocation or Why is a Badly Paid Nurse a Good Nurse?," Royal Holloway, University of London: Discussion Papers in Economics 03/4, Department of Economics, Royal Holloway University of London, revised Dec 2003.
  8. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
  9. Andrew Clark, 2001. "Unemployment As A Social Norm: Psychological Evidence from Panel Data," DELTA Working Papers 2001-17, DELTA (Ecole normale supérieure).
  10. Heyes, Anthony G., 2007. "Optimal wages in the market for nurses," Journal of Health Economics, Elsevier, vol. 26(5), pages 1031-1033, September.
  11. V. Kerry Smith & William H. Desvousges & Matthew P. McGivney, 1983. "The Opportunity Cost of Travel Time in Recreation Demand Models," Land Economics, University of Wisconsin Press, vol. 59(3), pages 259-278.
  12. George A. Akerlof & Rachel E. Kranton, 2005. "Identity and the Economics of Organizations," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 9-32, Winter.
  13. George A. Akerlof & Rachel E. Kranton, 2000. "Economics And Identity," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 715-753, August.
  14. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-35, December.
  15. William A. Darity & Arthur H. Goldsmith, 1996. "Social Psychology, Unemployment and Macroeconomics," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 121-140, Winter.
  16. Barton H. Hamilton, 2000. "Does Entrepreneurship Pay? An Empirical Analysis of the Returns to Self-Employment," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 604-631, June.
  17. Bruno S. Frey, 2005. "Knight Fever: Towards an Economics of Awards," CREMA Working Paper Series 2005-12, Center for Research in Economics, Management and the Arts (CREMA).
  18. Frank J. Cesario, 1976. "Value of Time in Recreation Benefit Studies," Land Economics, University of Wisconsin Press, vol. 52(1), pages 32-41.
  19. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
  20. Kreps, David M, 1997. "Intrinsic Motivation and Extrinsic Incentives," American Economic Review, American Economic Association, vol. 87(2), pages 359-64, May.
  21. Brown, Charles, 1980. "Equalizing Differences in the Labor Market," The Quarterly Journal of Economics, MIT Press, vol. 94(1), pages 113-34, February.
  22. Winkelmann, Liliana & Winkelmann, Rainer, 1998. "Why Are the Unemployed So Unhappy? Evidence from Panel Data," Economica, London School of Economics and Political Science, vol. 65(257), pages 1-15, February.
  23. Korpi, Tomas, 1997. "Is utility related to employment status? Employment, unemployment, labor market policies and subjective well-being among Swedish youth," Labour Economics, Elsevier, vol. 4(2), pages 125-147, June.
  24. Casey B. Mulligan, 1998. "Pecuniary Incentives to Work in the United States during World War II," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 1033-1077, October.
  25. Clark, Andrew E & Oswald, Andrew J, 1994. "Unhappiness and Unemployment," Economic Journal, Royal Economic Society, vol. 104(424), pages 648-59, May.
  26. Tom Kornstad & Thor O. Thoresen, 2002. "A Discrete Choice Model for Labor Supply and Child Care," Discussion Papers 315, Statistics Norway, Research Department.
  27. Karpoff, Jonathan M, 1985. "Non-pecuniary Benefits in Commercial Fishing: Empirical Findings from the Alaska Salmon Fisheries," Economic Inquiry, Western Economic Association International, vol. 23(1), pages 159-74, January.
  28. Viscusi, W Kip, 1993. "The Value of Risks to Life and Health," Journal of Economic Literature, American Economic Association, vol. 31(4), pages 1912-46, December.
  29. repec:cup:cbooks:9780521296762 is not listed on IDEAS
  30. Baron, James N., 1988. "The employment relation as a social relation," Journal of the Japanese and International Economies, Elsevier, vol. 2(4), pages 492-525, December.
  31. Taylor, Lowell J., 2007. "Optimal wages in the market for nurses: An analysis based on Heyes' model," Journal of Health Economics, Elsevier, vol. 26(5), pages 1027-1030, September.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:quaeco:v:49:y:2009:i:4:p:1236-1259. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.