Labor Supply of New York City Cab Drivers: One Day At A time
Life-cycle models of labor supply predict a positive relationship between hours supplied and transitory changes in wages. We tested this prediction using three samples of wages and hours of New York City cabdrivers, whose wages are correlated within days but uncorrelated between days. Estimated wage elasticities are significantly negative in two out of three samples. Elasticities of inexperienced drivers average approximately −1 and are less than zero in all three samples (and significantly less than for experienced drivers in two of three samples). Our interpretation of these findings is that cabdrivers (at least inexperienced ones): (i) make labor supply decisions "one day at a time" instead of intertemporally substituting labor and leisure across multiple days, and (ii) set a loose daily income target and quit working once they reach that target.
(This abstract was borrowed from another version of this item.)
|Date of creation:||Apr 1996|
|Publication status:||Published: Quarterly Journal of Economics, 1997, V. 112, #2 (May):408-441.|
|Contact details of provider:|| Postal: Working Paper Assistant, Division of the Humanities and Social Sciences, 228-77, Caltech, Pasadena CA 91125|
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|Order Information:|| Postal: Working Paper Assistant, Division of the Humanities and Social Sciences, 228-77, Caltech, Pasadena CA 91125|
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