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Non-pecuniary Value of Employment and Natural Resource Extinction

  • Y. Hossein Farzin

    (University of California)

  • Ken-Ichi Akao

    (Waseda University)

We assume that people value employment not only to earn income to satisfy their consumption needs but also as a means of community/social involvement that provides socio-psychological (non-pecuniary) benefits. We show that the latter incentive can encourage full employment harvesting resources and explain why poor resource-based communities may exhaust a natural resource in a finite time even if there is a sustainable path of resource consumption available. We show that communities could sustain their natural resources by using outside-the-community employment and economic diversification, but, to be effective, such policies must ensure that the outside wage rate and the initial capital stock are above certain minimum levels, which will be higher the longer these policies are delayed.

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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2006.24.

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Date of creation: Feb 2006
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Handle: RePEc:fem:femwpa:2006.24
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  1. Andrew Clark, 2001. "Unemployment As A Social Norm: Psychological Evidence from Panel Data," DELTA Working Papers 2001-17, DELTA (Ecole normale supérieure).
  2. Y. Hossein Farzin & Ken-Ichi Akao, 2004. "Non-pecuniary Value of Employment and Individual Labor Supply," Working Papers 2004.158, Fondazione Eni Enrico Mattei.
  3. 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.
  4. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-35, December.
  5. 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.
  6. 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.
  7. Di Tella, Rafael & MacCulloch, Robert J. & Oswald, Andrew J., 2001. "The Macroeconomics of Happiness," The Warwick Economics Research Paper Series (TWERPS) 615, University of Warwick, Department of Economics.
  8. Whelan, Christopher T. & Hannan, Damian F. & Creighton, Sean, 1991. "Unemployment, Poverty and Psychological Distress," Research Series, Economic and Social Research Institute (ESRI), number GRS150.
  9. George A. Akerlof & Rachel E. Kranton, 2000. "Economics And Identity," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 715-753, August.
  10. Farzin, Y Hossein, 1984. "The Effect of the Discount Rate on Depletion of Exhaustible Resources," Journal of Political Economy, University of Chicago Press, vol. 92(5), pages 841-51, October.
  11. H. Scott Gordon, 1954. "The Economic Theory of a Common-Property Resource: The Fishery," Journal of Political Economy, University of Chicago Press, vol. 62, pages 124.
  12. Romer, Paul M, 1986. "Cake Eating, Chattering, and Jumps: Existence Results for Variational Problems," Econometrica, Econometric Society, vol. 54(4), pages 897-908, July.
  13. Bruno S. Frey & Alois Stutzer, . "What can Economists Learn from Happiness Research?," IEW - Working Papers 080, Institute for Empirical Research in Economics - University of Zurich.
  14. 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.
  15. Farzin, Y. Hossein & Akao, Ken-Ichi, 2005. "Non-pecuniary Value of Employment and Natural Resource Extinction," Working Papers 190911, University of California, Davis, Department of Agricultural and Resource Economics.
  16. 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.
  17. 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.
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