Individual Labour Supply: A Suggestion

Individual labour supply is a difficult subject. My suggestion is to think along the following lines. At low productivity, one has to work 24 hours around the clock in order to survive. When productivity increases, one quickly starts working less hours, particularly since the kind of work at that level often concerns hard labour. This drop in supply likely produces a dip in the graph. At again higher levels of productivity, the kind of work is less exacting and pay is better, and one may work longer hours again. However, at the highest levels of productivity, labour again becomes a relative disutility. In summary, the graph looks like a dromedary, starting high at the left, having a dip in the neck, then the bump, and sliding away towards the tail. This shape conforms with findings of Quah 1993 on the distribution of productivity across nations. The paper is a Mathematica notebook that allows you to compute your own dromedary and to check the sensitivity of the overall shape (impression to the human mind) e.g. to range selections. The program Mathematica is being discovered by economists. You can get a 'MathReader' for free from or MathSource (info@wri.com or www.wri.com).