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"How Many Hours Would you Want to Work a Week?": Job Quality and the Omitted Variables Bias in Labour Supply Models

  • Nadia Steiber
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    This paper sets out to provide an understanding of how individuals form their preferences over the extent of their paid work involvement - their working time preferences - in different work environments and societal contexts. The main objective of the empirical analysis is to investigate how preferences of this kind are constructed at the individual level and adapted over time following changes in work- and familyrelated circumstances. The consideration of the Old and New Länder of Germany as cases for comparative analysis allows for a test of common factors in different contexts of economic conditions and gender relations. The empirical findings from a longitudinal analysis of the German Socio-Economic Panel (1993-2003) run counter to the predictions of neoclassical labour supply theory. This owes to a fundamental difference in terms of theoretical approach. While (most) economists tend to view paid work in instrumental terms - as something that people perform only for its monetary rewards, this study takes account of intrinsic work rewards as central determinants of work motivation. We find the qualitative experience of work to exert an independent influence on individuals' preferences over work hours, and therefore argue for the inclusion of work quality as a central factor in labour supply decisions.

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    File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.88371.de/diw_sp0121.pdf
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    Paper provided by DIW Berlin, The German Socio-Economic Panel (SOEP) in its series SOEPpapers on Multidisciplinary Panel Data Research with number 121.

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    Length: 27 p.
    Date of creation: 2008
    Date of revision:
    Handle: RePEc:diw:diwsop:diw_sp121
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    14. Drolet, Marie & Morissette, Rene, 1997. "Working More? Working Less? What Do Canadian Workers Prefer?," Analytical Studies Branch Research Paper Series 1997104e, Statistics Canada, Analytical Studies Branch.
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    17. 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.
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    23. Rob Euwals, 2005. "The predictive value of subjective labour supply data: A partial-adjustment model with measurement error," Empirical Economics, Springer, vol. 30(2), pages 309-329, 09.
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