UZH-Logo

Maintenance Infos

Do workers work more if wages are high? Evidence from a randomized field experiment


Fehr, Ernst; Goette, Lorenz (2007). Do workers work more if wages are high? Evidence from a randomized field experiment. American Economic Review, 97(1):298-317.

Abstract

Most previous studies on intertemporal labor supply found very small or insignificant substitution effects. It is possible that these results are due to constraints on workers' labor supply choices. We conducted a field experiment in a setting in which workers were free to choose hours worked and effort per hour. We document a large positive elasticity of overall labor supply and an even larger elasticity of hours, which implies that the elasticity of effort per hour is negative. We examine two candidate models to explain these findings: a modified neoclassical model with preference spillovers across periods, and a model with reference dependent, loss-averse preferences. With the help of a further experiment, we can show that only loss-averse individuals exhibit a negative effort response to the wage increase.

Most previous studies on intertemporal labor supply found very small or insignificant substitution effects. It is possible that these results are due to constraints on workers' labor supply choices. We conducted a field experiment in a setting in which workers were free to choose hours worked and effort per hour. We document a large positive elasticity of overall labor supply and an even larger elasticity of hours, which implies that the elasticity of effort per hour is negative. We examine two candidate models to explain these findings: a modified neoclassical model with preference spillovers across periods, and a model with reference dependent, loss-averse preferences. With the help of a further experiment, we can show that only loss-averse individuals exhibit a negative effort response to the wage increase.

Citations

94 citations in Web of Science®
116 citations in Scopus®
Google Scholar™

Altmetrics

Downloads

84 downloads since deposited on 09 Jun 2008
24 downloads since 12 months
Detailed statistics

Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Date:March 2007
Deposited On:09 Jun 2008 14:29
Last Modified:05 Apr 2016 12:23
Publisher:American Economic Association
ISSN:0002-8282
Additional Information:Copyright: American Economic Association
Publisher DOI:10.1257/aer.97.1.298
Official URL:http://www.atypon-link.com/AEAP/doi/pdf/10.1257/aer.97.1.298
Permanent URL: http://doi.org/10.5167/uzh-2535

Download

[img]
Preview
Filetype: PDF
Size: 1MB
View at publisher

TrendTerms

TrendTerms displays relevant terms of the abstract of this publication and related documents on a map. The terms and their relations were extracted from ZORA using word statistics. Their timelines are taken from ZORA as well. The bubble size of a term is proportional to the number of documents where the term occurs. Red, orange, yellow and green colors are used for terms that occur in the current document; red indicates high interlinkedness of a term with other terms, orange, yellow and green decreasing interlinkedness. Blue is used for terms that have a relation with the terms in this document, but occur in other documents.
You can navigate and zoom the map. Mouse-hovering a term displays its timeline, clicking it yields the associated documents.

Author Collaborations