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Expanding the behavioral foundations of labor economics

  • Bruce E. Kaufman

The author examines, critiques, and suggests modifications to the psychological assumptions of the rational choice model of the human agent that underlies much of the theoretical work in modern, neoclassical labor economics. He analyzes the rational choice model in terms of three psychological constructs-motivation, cognition, and emotion-in the context of a five-step model of the human behavioral process. Examples from the empirical and theoretical labor economics literature illustrate both problems with the current theory and new or improved insights and predictions that can be gained by incorporating additional psychological theories and concepts in economic analysis. The author concludes that although the rational choice model is a powerful and productive conceptual device, in many cases it cannot adequately explain behavior in the world of work, and labor economic theory would be improved by a more interdisciplinary approach that integrates conceptual and empirical research from the behavioral sciences. (Abstract courtesy JSTOR.)

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Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

Volume (Year): 52 (1999)
Issue (Month): 3 (April)
Pages: 361-392

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Handle: RePEc:ilr:articl:v:52:y:1999:i:3:p:361-392
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