Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73918
Authors: 
Farzin, Y. Hossein
Akao, Ken-Ichi
Year of Publication: 
2006
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 21.2006
Abstract: 
Recognizing that people value employment not only to earn income to satisfy their consumption needs, but also as a means to gain socio-psychological (nonpecuniary) benefits, we show that once nonpecuniary work incentives are incorporated into standard labor supply theory, (i) the wage rate under-estimates (over-estimates) the true value of nonwork/leisure time when work has nonpecuniary benefits (costs), (ii) nonpecuniary benefits can be a substitute for monetary wages as work incentives, (iii) at very low wage rates, work can become a net source of utility, and (iii) the shape of labor supply curve differs from standard theory. We also identify conditions under which a greater nonpecuniary work incentive generates a larger individual labor supply, and examine the effects of non-wage income on labor supply both for paid and voluntary work.
Subjects: 
Nonpecuniary incentives
Labor supply
Non-wage income
Voluntary work
JEL: 
D62
J22
I31
Document Type: 
Working Paper

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