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What Do Fishermen Tell Us That Taxi Drivers Do Not? An Empirical Investigation of Labor Supply

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  • Tess M. Stafford

Abstract

Recent empirical findings have cast doubt on the neoclassical model of labor supply. However, estimation issues, and not workers' behavior, may be responsible for these findings. This paper investigates this possibility by examining the daily labor supply of Florida lobster fishermen. I invariably find that fishermen work more when earnings are temporarily high, behavior that is consistent with a neoclassical model of labor supply. Furthermore, methods that do not control for measurement error and endogeneity of the wage not only produce downward-biased estimates of labor supply elasticities but also generate a spurious negative and significant elasticity of daily hours.

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  • Tess M. Stafford, 2015. "What Do Fishermen Tell Us That Taxi Drivers Do Not? An Empirical Investigation of Labor Supply," Journal of Labor Economics, University of Chicago Press, vol. 33(3), pages 683-710.
    • Handle: RePEc:ucp:jlabec:doi:10.1086/679682
    DOI: 10.1086/679682
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    7. Scott French & Tess Stafford, 2017. "Returns to Experience and the Elasticity of Labor Supply," Discussion Papers 2017-15, School of Economics, The University of New South Wales.
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    10. Zubrickas, Robertas, 2023. "The relative income effect and labor supply," Journal of Economic Behavior & Organization, Elsevier, vol. 209(C), pages 176-184.
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    12. MacDonald, Daniel & Mellizo, Philip, 2017. "Reference dependent preferences and labor supply in historical perspective," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 69(C), pages 117-124.
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    15. 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.
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    17. Ali Elminejad & Tomas Havranek & Roman Horvath & Zuzana Irsova, 2023. "Intertemporal Substitution in Labor Supply: A Meta-Analysis," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 51, pages 1095-1113, December.
    18. Leong, Kaiwen & Li, Huailu & Xu, Haibo, 2019. "Effect of Enforcement Shock on Pushers' Activities: Evidence from an Asian Drug-Selling Gang," IZA Discussion Papers 12083, Institute of Labor Economics (IZA).
    19. Stanton, Christopher T. & Sandvik, Jason & Saouma, Richard & Seegert, Nathan, 2018. "Analyzing the Aftermath of a Compensation Reduction," CEPR Discussion Papers 13242, C.E.P.R. Discussion Papers.
    20. Hammarlund, Cecilia, 2018. "A trip to reach the target? – The labor supply of Swedish Baltic cod fishermen," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 75(C), pages 1-11.
    21. Timothy J. Richards, 2020. "Income Targeting and Farm Labor Supply," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(2), pages 419-438, March.
    22. Luxi Shen & Samuel D. Hirshman, 2023. "As Wages Increase, Do People Work More or Less? A Wage Frame Effect," Management Science, INFORMS, vol. 69(8), pages 4721-4732, August.
    23. Alessandro Saia, 2022. "Trouble Underground: Demand Shocks and the Labor Supply Behavior of New York City Taxi Drivers," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 8(1), pages 1-27, March.
    24. Garry F. Barrett & Daniel S. Hamermesh, 2019. "Labor Supply Elasticities: Overcoming Nonclassical Measurement Error Using More Accurate Hours Data," Journal of Human Resources, University of Wisconsin Press, vol. 54(1), pages 255-265.
    25. Tess M. Stafford, 2018. "Do workers work more when earnings are high?," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-11, November.

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